Based on RBA chart, RBA reduces the cash rate at 0.10% which was incredibly low in 2020 of average inflation target 2-3%. This has made it mainly for business as well as individuals to borrow money at this price. This monetary policy increases the aggregate demand. This action is expansionary monetary policy as it increases the supply of money in the economy. Its main objective is boosting aggregate demand and economic welfare by making sure money reaches the hands of the people as well as the business that need cash flows. However, the cash interest rate has increase up to 4.35% in 2024, the RBA can indeed reduce liquidity in the cash market, which in turn increase the cash rate. By using OMOs tool where the RBA sells securities, it takes cash out of system and repurchase agreement in used. The RBA choose not to sterilise an overnight shortage, which means it does not offset the shortage by injecting more liquidity into the system