[Ultimate Newbie]

Originally Posted by Tietäjä

Can you confirm that "cash rate" equals the interest rate of the daily open market operations (ie. lending overnights to private sector), which would equal marginal lending facility? Cash rate isn't described in the ECB glossary, so just to know we're talking about the same subject here.

I'm not in a position to confirm or deny anything, however from what you've told me, it sounds like they are very similar concepts. Have a read of this, and if it sounds like the marginal lending facility (which my 5 mins of googling would suggest), then it probably is.

Yeah. ECB is just a more expansive one, I guess.

And expensive .

Yeah. But the amount of money changes irregardless of how many bills you print, and how many bills you print doesn't really affect the economy, as long as you don't print more bills than there's actual money.

That doesnt make sense. I said "printing" money, which means the creation of money using a term that originated in the times before computers when all money was actually a physical note or coin. Thus, just because money is "printed" doesnt mean into a physical object like a note or coin, but merely money that now exists as opposed to not existing before. "destroying" (for want of a better term), is clearly the opposite.

Actual destruction of bills and coins seems vastly useless to me too. Could you elaborate why a central bank would destroy bills and coins, and what's the gain to it?

I said that the Reserve Bank did not do this. I suppose, however, it could be done in a place where the currency no longer had worth, or if it was being changed for a 'new' currency like from francs to euros, but i would imagine a more efficient method would be on a voluntary basis.