During the 2008 global financial crisis the Reserve Bank cut the cash rate from 7 per cent per year to 3 per cent per year.To achieve the target of 3 per cent per year the Reserve Bank

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To lower the cash rate, the Reserve Bank increased the supply of funds in the market by increasing the monetary base. This was done by purchasing assets from banks, which increased their reserves and allowed them to increase lending. By increasing the supply of reserves, the Reserve Bank was able to shift the supply curve to the right, which resulted in a lower interest rate (cash rate) and higher demand for funds.

During the 2008 Global Financial Crisis the Reserve Bank Cut