The Future System for Monetary Policy Implementation in Australia April 2024

The RBA Board considered broad options for the future system for monetary policy implementation in Australia at its March 2024 meeting. It endorsed a plan to operate with ample reserves (also exchange settlement or ES balances), by meeting demands for reserves via full allotment auction at the RBA’s open market operations (OMO). The broad rationale for the system endorsed by the Board was discussed in a recent speech by the Assistant Governor (Financial Markets) Christopher Kent (see: The Future System for Monetary Policy Implementation). He explained why an ample reserves system was preferred to either staying with an excess reserves system or returning to a scarce reserves system.

The detailed design of the system is underway and will be informed by public consultation and further analysis by RBA staff. The RBA will review written submissions from the consultation process and may meet with stakeholders.

Stakeholders were invited to provide written submissions in response to the plan. The closing date for submissions was 10 May 2024.