Daily Management Review

Australian Central Bank cuts base rate to record low


The Reserve Bank of Australia (RBA) lowered its key interest rate by 25 basis points to a record low 0.5% per annum to support the country's economy in the context of the spread of coronavirus.

RBA chief Philip Lowe said the regulator could continue easing the policy.

"The global spread of coronavirus is likely to delay Australia's move towards inflation target and employment target. The central bank is ready to further soften policies to support the country's economy," he said.

RBA was the first of the central banks of developed countries to cut rates in response to the spread of coronavirus, which is holding back the global economic recovery, writes Dow Jones.

The weakening of the Chinese economy, where the epicenter of the outbreak of coronavirus is located, is an extremely negative factor for Australia, since about a third of Australian exports account for China.

Australia maintains a record for the duration of growth without a recession among developed countries - 28 consecutive years. In 2019, the RBA cut the base rate three times to support the economy in the context of a trade dispute between the US and China. 
Australian Prime Minister Scott Morrison announced that the government is preparing a package of fiscal stimulus measures.

source: reuters.com