When the Reserve Bank of Australia raises the cash rate, in the foreign exchange market people
Dollars and the price of the dollar on the foreign exchange market.

Question

Quizplus · Accepted Answer

When the Reserve Bank of Australia raises the cash rate, it typically leads to higher interest rates, making Australian assets more attractive to investors. This increases demand for the Australian dollar as investors buy it to invest in these assets, leading to a rise in the price of the dollar in the foreign exchange market.

When the Reserve Bank of Australia Raises the Cash Rate