Through its impact on cash rates,the Reserve Bank can affect rates further out on the maturity spectrum.What is usually the order of transmission?

Question

Quizplus · Accepted Answer

The typical order of transmission starts with the central bank influencing cash rates, which then affects short-term market rates like commercial bill yields. Following this, banks adjust their prime lending rates to reflect the changes in their borrowing costs. Finally, banks' deposit rates are adjusted, often lagging behind the changes in lending rates.

Through Its Impact on Cash Rates,the Reserve Bank Can Affect