In order to help Australia recover from the economic contraction caused by the epidemic, the Bank of Australia (RBA) announced on the 3rd that it will lower the official cash rate to a record low of 0.1% and announced a series of other measures.
ABC News reported that the Reserve Bank of Australia announced on the 3rd that it would lower its official cash rate from a record low of 0.25% to 0.1%, and it is not expected to increase for at least 3 years. In addition, the Reserve Bank of Australia also reduced the 3-year yield curve control target for government bonds from 0.25% to 0.10%, and through its 200 billion yuan term financing fund (TFF) to reduce the interest rate on commercial bank loans from 0.25% Reduced to 0.10%, and reduced the interest rate on foreign exchange settlement balances to zero. The new record low interest rates will also apply to banks’ regular financing instruments.
At the same time, the Reserve Bank of Australia also confirmed that it will purchase 100 billion yuan worth of Australian government bonds to increase inflation and encourage loans and investment. This approach is called quantitative easing.
In this regard, the Governor of the Bank of Australia Philip Lowe said that these measures will help solve the problem of high levels of unemployment, which he described as “an important national priority.” Lowe said that the Reserve Bank of Australia is “committed to supporting job creation”. Experts expect that the Reserve Bank of Australia’s purchase of bonds and lower interest rates will help Australia’s economic recovery by reducing borrowers’ financing costs, lowering the exchange rate, and supporting asset prices and balance sheets.
