Who manages Australia's currency and monetary policy?

The Reserve Bank of Australia (RBA) manages Australia's currency and monetary policy, as an independent central bank operating under the Reserve Bank Act 1959. The RBA issues Australian banknotes (the Commonwealth has had this power since federation under section 51(xii)), sets the official cash rate to influence inflation and employment, supervises the payments system, and acts as the banker to the Commonwealth government.

Monetary policy is the RBA's main task. The Reserve Bank Board meets eight times a year (reduced from eleven times following 2024 reforms) to set the cash rate, which is the interest rate that applies to overnight unsecured loans between banks. Movements in the cash rate flow through to the rates banks charge customers on home loans, business loans, and credit cards. The RBA's mandate is to achieve an inflation target of 2 to 3 per cent on average over time, full employment, and the economic prosperity and welfare of the Australian people.

The cash rate has been highly active in recent years. The RBA cut the cash rate to 0.1 per cent in November 2020 during the COVID-19 pandemic, raised it starting in May 2022 in response to rising inflation, and reached a peak of 4.35 per cent in November 2023 before easing from 2025 as inflation moderated. The 2024 reforms split the RBA Board into two boards: a Monetary Policy Board (focused on interest rate decisions) and a Governance Board (focused on RBA operations).

The RBA also issues currency. Australian banknotes (5, 10, 20, 50, and 100 dollar notes) are printed at Note Printing Australia in Melbourne, a subsidiary of the RBA. The Royal Australian Mint in Canberra produces coins. Australian banknotes feature Indigenous Australian and other Australian figures: the 5 dollar note features King Charles III (replacing Queen Elizabeth II from late 2025); the 10 dollar note features Banjo Paterson and Dame Mary Gilmore; the 20 features Mary Reibey and the Reverend John Flynn; the 50 features David Unaipon and Edith Cowan; and the 100 features Dame Nellie Melba and Sir John Monash. Polymer banknotes (a technology invented in Australia in 1988) replaced paper notes between 1992 and 1996, with the current Next Generation series rolled out from 2016 to 2020.