RBA to shift to ‘ample reserves’ operational framework

New approach will be simpler to operate and reduce market volatility risk, assistant governor Kent says

Reserve Bank of Australia
The Reserve Bank of Australia
Photo: Alex Towle

The Reserve Bank of Australia (RBA) will shift to a new operational framework for conducting monetary policy, one of its assistant governors announced today (April 2).

Under the new framework, the RBA will provide “ample” liquidity through regular open market operations, Christopher Kent said in a speech. This new operational framework lies somewhere between the current floor system, and the “corridor system” with scarce reserves which the RBA used before the pandemic, Kent said.

The RBA board

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