Monetary Policy

Wikipedia defines Monetary Policy as follows:

Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability.

 

The RBA defines its responsibility for monetary policy as follows:

RBA-set-rates

 

The RBA openly states that their actions affect the price of assets, goods and services in the economy (i.e. they can make prices on goods and services go up or down). This is an indication of the awesome power held by the RBA. Their own diagram clearly displays this reality.

RBA-prices

 

In plain English - on a regular basis the RBA manipulates the price of "Reserve Bank money", which in turn affects the price of "Commercial Bank money" (e.g. interest rates on home loans) and also the prices on all goods and services in the economy.

In any other industry, this would be called "price fixing" - with company directors prosecuted and thrown into jail.