Open Market Operations in Australia 2025: What You Need to Know

Open Market Operations (OMO) might sound like financial jargon, but they are at the heart of how the Reserve Bank of Australia (RBA) manages the nation’s economic pulse. In 2025, with inflation still a hot topic and global markets in flux, OMO remains the RBA’s sharpest tool for steering interest rates, influencing credit, and keeping Australia’s financial system stable. Here’s what Australians need to know about how OMO works, the changes in 2025, and what it means for households, borrowers, and investors.

What Are Open Market Operations?

Open Market Operations refer to the RBA’s daily buying and selling of government securities in the open market. The goal? To control the supply of money and influence the cash rate—the benchmark interest rate for lending and borrowing between banks. This, in turn, shapes the rates that ordinary Australians see on their mortgages, savings accounts, and business loans.

• Buying securities: The RBA injects money into the banking system, lowering interest rates and encouraging borrowing and spending.
• Selling securities: The RBA withdraws money from the system, raising rates and cooling off excess demand or inflation.

These operations are typically conducted through short-term repurchase agreements (repos), where the RBA provides cash to banks in exchange for collateral, with the agreement to reverse the transaction at a later date.

2025: OMO in a Shifting Economic Landscape

In 2025, Open Market Operations are under more scrutiny than ever. With inflation moderating but still above the RBA’s 2–3% target, and global uncertainty from shifting trade policies and ongoing geopolitical tensions, the central bank has tweaked its OMO toolkit:

• More frequent OMO auctions: The RBA now conducts multiple OMO rounds per week, responding to faster-moving global markets and digital banking flows.
• Wider range of eligible securities: To ensure liquidity, the RBA accepts a broader set of collateral, including green bonds and state government securities—supporting both stability and Australia’s sustainability goals.
• Transparent communication: The RBA publishes real-time data on OMO outcomes, aiming to reduce speculation and provide clear signals to markets and households.

For example, in March 2025, after a spike in global oil prices threatened to push up inflation, the RBA responded by selling more securities, tightening liquidity and supporting a modest rise in the cash rate. This move quickly filtered through to banks, who adjusted their lending rates, slowing consumer spending just enough to keep inflation in check.

Why OMO Matters for Everyday Australians

Open Market Operations may seem remote, but their impact is felt on Main Street as much as in the boardroom. Here’s how:

• Mortgage rates: When the RBA uses OMO to lower the cash rate, banks can pass on lower borrowing costs to homeowners. Conversely, tightening via OMO makes loans more expensive.
• Savings returns: OMO-driven shifts in the cash rate affect term deposit and savings account returns. Savers benefit from higher rates when the RBA is fighting inflation, but see lower yields in a stimulative environment.
• Business investment: Lower rates make it cheaper for businesses to borrow and expand, while higher rates can slow hiring and investment.
• Australian dollar: Changes in OMO can influence the Aussie dollar’s value, affecting import prices and overseas travel costs.

Understanding OMO gives Australians a front-row seat to the country’s economic story—and helps households and businesses plan for what’s next.

The Future: Digital OMO and the Rise of Real-Time Finance

Looking forward, the RBA is piloting digital OMO platforms, leveraging blockchain and instant settlement to make operations more efficient. This could mean even faster responses to shocks, greater transparency, and lower costs for the financial sector. With the government’s 2025 financial sector review supporting digital innovation, expect more changes in how OMO is conducted in coming years.

Whether you’re a first-home buyer, a retiree, or a business owner, the ripples from the RBA’s daily OMO decisions are shaping your financial future. Keeping an eye on these moves—and understanding the logic behind them—can help you stay ahead in a changing economy.