Home Regulators Reserve Bank of Australia (RBA)

Reserve Bank of Australia (RBA)

This page explains the role of the RBA (Reserve Bank of Australia) in maintaining the Australian financial markets. We cover areas such as the responsibilities and importance of the RBA. Also, you will learn how the RBA impacts customers who use the money transfer companies to send funds abroad. 

Updated: 29/09/2022
Read time: 6 minutes
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What Is the RBA?

The RBA is Australia’s central bank and the authority that issues banknotes. The role was assigned to this entity on the 14th of January 1960 due to the Reserve Bank Act 1959. The act removed the Commonwealth Bank from the role. 

The headquarters of RBA is in the Reserve Bank of Australia Building in Sydney. The state has 100% ownership of the organisation, and the Governor is Philip Lowe. Also, the target interest rate for the bank is 1.35%. 

The RBA is responsible for the functioning of specific legislation. They are the statutory authority of the banking industry and are established by an Act of Parliament, the Reserve Bank Act 1959. They make the rules of the banking industry and ensure that all banks operating in Australia follow them. 

What Is the RBA Responsible for?

This section takes a closer look at the responsibilities of the RBA. Here you can find out their role and how they ensure that the Australian economy continues functioning correctly. 

  • Policies: the RBA has the authority to create new policies for how the entities in Australia’s banking system must act. They constantly review/update the guidelines to improve and reflect the constantly developing fintech sector. 
  • Problems and trends: they monitor the trends and issues within the Australian financial system. This ensures that the RBA has the pulse on the state of the economy and can make changes to improve the situation. 
  • Coordination: the RBA promotes the coordination of the different regulators in the Australian financial markets. The efficient sharing of information ensures that each regulator can do its job more effectively. 
  • Stability: the RBA creates and enforces policies that promote the strength and stability of the Australian economy. This includes the control of inflation through monetary policy so that the yearly average is at around 2-3%. 
  • Currency: they are responsible for the stability of the Australian Dollar. This means they need to do what is possible to improve the conversion rate of AUD with other currencies. 

Overall, the RBA is an integral part of the Australian financial markets. Their responsibility is arguably the biggest among the regulators. They also manage the gold and financial reserves of the Australian Government. 

It is estimated that the net worth of the Australian Government is around 101 billion AUS. Therefore, the RBA has an immense responsibility in the economy; without their oversight, it would be difficult to have stability. 

Why Is the RBA Important?

Now let us take a look at the reason why the RBA is important. These factors indicate why money transfer customers can trust the economy and the banking system. You will learn how the RBA promotes confidence and trust in Australia’s economy. 

  • Dependability: the RBA has been Australia’s central bank since 1960, which is a long time. Therefore, they have proven themselves worthy of the role as they endured several economic crisis events. The experience can be used moving forward to place Australia in the best position to succeed. 
  • Improve economy: the Australian economy would be left up to chance without the involvement of the RBA. The organisation monitors various aspects of the economy and fine-tunes parameters to ensure it does not become too unstable. This ensures that the economy’s participants can feel safe about using the services and holding money in AUS. 
  • Updated: the continued improvement of legislation and banking system rules puts Australia in the best position to succeed. In addition, the fiscal policies aim to meet the constantly evolving challenges, which tend to change as technology develops. 

RBA Regulations

Now let us dive deeper into the specifics of the RBA. This will help you understand the relevant regulations, crimes, industries and accountability. At a glance, you can get a good sense of the scope of the RBA and where their responsibilities might end. 

Regulations: the governance structure of the RBA is laid out by the Reserve Bank Act 1959, and according to those rules, the Governor is in charge of the Bank. Part of the responsibility includes managing a payment system policy. 

The Governor also has the responsibilities laid out in the Public Governance, Performance and Accountability Act 2013 (PGPA Act). This relates to the management of the bank, which the Audit Committee and Remuneration Committee check. 

Crimes: the RBA does not deal with crimes since they are in charge of bigger-picture legislation to get the economy balanced. However, some policies they pass can help reduce the chances of criminals taking advantage of Australia’s financial system. 

Industries: since the RBA is in charge of the entire economy of Australia, it means that they are involved in all sectors and any consumer that uses AUS for transactions. This also includes money transfer companies and customers that use them. Examples of these companies include Wise, WorldRemit and TorFX. 

Accountability: since the RSB is an independent central bank, they are accountable to the Parliament. Also, the Reserve Bank Act 1959 states that the bank must consult with the Australian Government. 

What Regions Does the RBA Cover?

The RBA is in charge of the Australian economy, covering the entire country. However, to complete their duties correctly, they will need to cooperate with international financial institutions to complete their duties correctly. For example, when managing the country’s foreign exchange reserves, they need to keep an eye on what is happening worldwide to ensure that the correct transactions are executed in the country’s interests. 

When Might You Encounter the RBA?

As a money transfer customer, you are unlikely to have direct contact with the RBA. However, they are responsible for bigger-picture parts of the Australian economy instead of getting bogged down with the small details of specific companies or consumers. 

Can the RBA Make New Rules?

Yes, the RBA is in charge of developing new fiscal policies that shape the Australian economy. The rules changes are in pursuit of stabilising and managing the economy. For example, they currently aim to ensure the inflation rate is 2-3% annually and can change the rules to ensure that is the case. 

How to Contact the RBA?

This section shares the contact details for the RBA. You may wish to contact the organisation to learn more about how they manage the Australian economy and its effect on the money transfer industry. 

  • Phone: the toll-free number is 1800 300 288, and the regular number is +61 2 9551 8111. 
  • Email: you can also send them an email at rbainfo@rba.gov.au

Bottom Line

Overall, the RBA is one of Australia’s most important financial institutions for managing the health of the economy. As the central bank, they are in charge of managing the gold and foreign exchange reserves of the country. Also, they set the policy to ensure the economy is stable and balanced, which means money transfer customers can have faith in the economy. 

We encourage you to read our other guides to continue learning more about sending money to Australia. These include Send Money To Australia and Send Money from the United States to Australia. Checking out those pages will help you save money by getting the best currency conversion rates and reduced fees. 

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April Summers

April is a trained journalist and the Content Editor for MoneyTransfers.com. She has 10 years experience writing about a diverse range of subjects, from financial services to arts and entertainment. When she’s not writing about global remittances she can be found daydreaming about her next holiday abroad.