30 Day Interbank Cash Rate

What is the Australian 30 day Interbank Cash Rate?

The Australian 30 day Interbank Cash Rate is a futures contract and is assessed on the Interbank Overnight Cash Rate published by the Reserve Bank of Australia (RBA).

Monthly contracts are available up to 18 months ahead. Minimum price increment of 0.005 basis points. A 0.01 basis point move is equal to $24.66 AUD. Cash Settled against the monthly average of the Interbank Overnight Cash Rate as published by the Reserve Bank of Australia for that contract month.

Uses of the Australian 30 day Interbank Cash Rate

General uses include:

  • ‚ÄčIt enables investors to hedge against fluctuations in the overnight cash rate (this in turn helps to better manage their daily cash exposure)
  • Managing interest rate risk at the short end of the yield curve 
  • Managing balance sheet mismatches
  • Hedging against anticipated fluctuations in the overnight cash rate
  • Outright trading on anticipated changes, or lack of changes, in the official cash rate 
  • Trading on anticipated changes in the yield curve shape 
  • Income enhancement opportunities for portfolios with cash exposures

Risks of the Australian 30 Day Interbank Rash Rate

All futures contract will feature the same risk through the direction in which you anticipate the contract to rise or fall. If you anticipate a currency to increase in value and it ends up falling in value. The long position that you hold will also fall in value.

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