Official cash rate

Official cash rate (OCR) is the rate of interest that the Reserve Bank of Australia (RBA) charges on its overnight loans and advances to commercial banks (e.g. Commonwealth Bank, Westpac, ANZ). OCR influences the cost of borrowing money and allows the Reserve Bank to influence the level of economic activity and inflation. When OCR decreases, home loan interest rates will often drop too, although various factors may impact interest rates.