Australian Stock Market: The Australian stock market is one of the largest markets in the world now. In the last ten years the growth of the stock market of this country has been phenomenal. In 1992 the domestic market capitalization was around $198 billion and the market capitalization has augmented to $700 billion in 2002. The sectors which have grown considerably due to this factor are the Finance and Insurance sector. It has to be mentioned that almost every sector has experienced a boom during this period and the growth of the market is inversely proportionate to the growth of the economy. The liquidity of the Australian market has witnessed significant growth and the market’s strength can be seen by its capitalization. Currently there are two thousand and fourteen companies who are listed in the Australian Securities Exchange, which is the major stock market of the country. Apart from the main stock exchange there are also other markets in Australia like the ‘Bendigo Stock Market’ and ‘National Stock Exchange of Australia.
Australian Money Market: Australian money market and financial market is regulated by the Reserve Bank. It ensures the proper liquidity of the market. The Reserve Bank of Australia is also responsible for pumping money into the banking system. For the members and participants of the financial markets of Australia, there is an association called the Australian Financial Markets Association. This association ensures a perfect operation of the Over- the- Counter markets of Australia which is around $72 trillion. It is the responsibility of the Reserve Bank to keep the inflation rate under control and it aspires to achieve a 2 to 3 % inflation rate in average. The monetary policies in Australia which are implemented are based on the ‘cash rate’. This ‘cash rate’ is influenced significantly by the ‘open market operation’ or the ‘domestic market operation’.