What is the Official Cash Rate?

The official cash rate is the term used in Australia and New Zealand for the interest rate for transactions between banks and is the rate at which the central bank charges on overnight loans between commercial banks.

It is a tool used by the Reserve Bank to influence economic activity and inflation. The lower the rate, the more economic activity is encouraged. The higher the rate, the less economic activity is encouraged.

How does this affect my crypto holdings?

If the cash rate goes down, you can expect much more attractive returns on your crypto returns because at this point in time crypto currencies are considered risk on assets i.e. when economic activity is encouraged, investors take on more risks because the cost of borrowing money 💰 is much less.

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