Australia - Money Market Rate

F1 Interest Rates and Yields – Money Market:

• The market which deals in short-term discount securities such as Treasury notes, bank bills and promissory notes. Major participants in this market include the Reserve Bank of Australia, banks, superannuation funds, insurance companies, investment trusts, investment banks, building societies and large corporates.
• The 'Target cash rate' is set by the Reserve Bank's Board at each Board meeting. From January 1990 the Bank commenced announcing an explicit target to the market. ‘Interbank rate’ is a weighted average of the interest rates at which banks have borrowed and lent exchange settlement funds overnight. The 11am call rate is used prior to July 1998.
•  ‘Bank accepted bills’ are estimated end of day bank bill rates sourced from AFMA. Prior to March 1995 estimated midday yields are shown.
•  ‘Overnight indexed swaps’ a bilaterally traded, or over-the-counter (OTC), derivative in which one party agrees to pay the other party a fixed interest rate in exchange for receiving the average cash rate recorded over the term of the swap. Overnight indexed swaps are closing market rates.
•  'Treasury notes' are closing yields based on a survey of the market. There were no Treasury note yields between May 2002 and March 2009.

F2  Interest Rates and Yields – Capital Market:

• A market for medium to long-term financial instruments. Financial instruments traded in the capital market include shares, and bonds issued by the Australian Government, State governments, corporate borrowers and financial institutions.
• ‘Indexed bonds’ yields are those on bonds with the longest time to maturity, also at the end of the day.

F1: The 'Interbank Overnight Cash Rate' is a weighted average interest rate on overnight unsecured loans between banks in the Australian dollar market (the ‘Cash Market’). From 9 May 2016 the Cash Rate is calculated from transactions settled in the Reserve Bank Information Transfer System (RITS). For more details, see the Cash Rate Procedures Manual <http://www.rba.gov.au/mkt-operations/resources/cash-rate-methodology/cash-rate-procedures-manual.html>. From July 1998 until 6 May 2016, the Cash Rate is the weighted average of the interest rates at which banks borrowed and lent exchange settlement funds overnight, calculated from a survey of Cash Market participants. The 11am call rate is used prior to July 1998.

F2: Figures are estimated yields at end of day. Yields for the Australia Government ‘Indexed’ bond prior to 18 September 2013 are sourced from a survey of dealers conducted by the RBA. All other yields are sourced from Yieldbroker Pty Limited.

Interest rates and yields are representative. They are the midpoint of predominant bid and offer quotations in each market as identified by the RBA.

The daily government bond yields data are currently published by Yieldbrokers and distributed on the RBA's website. Prior to May 2013, the data are calculated by RBA and have been archived under the mnemonic name "RBAFCMYGBAG?DD.IAUS". Although the source changed but the overall methodology remained the same.