Commonwealth Government Securities (1 Viewer)

[slix_88]

I would like to know what they are??? I have read many definitionions, but they all confuse me! As well, i would like to know what their roles is in Reserve Bank Market operations.

Thank you

 

[kaylz]

Have you consulted your textbook? Hit up the economist website? If they haven't helped you then post again.

 

[sunjet]

They are part of monetary policy, domestic market operations to affect the level of cash rate, thus the interest rate in the short term on the demand side.

If the government buys securities there is an excess of funds in banks settlement account, and thus the cash rate falls and so do interest rates.

If the government sells securities there is a shortage of funds and thus the cash rate and interest rate increases.

 

[0o0]

remember it like this

sexy sally sells securities. interest goes up. (becasue she is sexy)

boring bernie buys bonds. interest goes down (because he is boring)

sally and bernie are the RBA and if they want interest rates to go up, they'll sell.

very usefull, please use it well.

 

[sunjet]

remember it like this

sexy sally sells securities. interest goes up. (becasue she is sexy)

boring bernie buys bonds. interest goes down (because he is boring)

sally and bernie are the RBA and if they want interest rates to go up, they'll sell.

very usefull, please use it well.

lol you went to leading edge =)

 

[0o0]

that guy stole that trick from me