AUSTRALIAN CENTRAL BANK CUTS KEY INTEREST RATE TO 0.1%
Australia’s central bank cut its benchmark interest rate by 0.15 of a percentage point to a record low 0.10% in a bid to lift the economy from a pandemic-induced recession, Rod McGuirk reported for the Associated Press (AP).
The move was the first since March when the Reserve Bank of Australia board made two cuts of a quarter of a percentage point each two weeks apart.
The Reserve Bank also announced it would buy 100 billion Australian ($70 billion) of government bonds of maturities of around five-to-10 years over the next six months. The bank is prepared to buy bonds in whatever quantity is required to achieve a 3-year yield target of 0.1%, Reserve Bank governor Philip Lowe said in a statement.
“With Australia facing a period of high unemployment, the Reserve Bank is committed to doing what it can to support the creation of jobs,” Lowe said. Recent economic data have been better than expected and the near-term outlook was better than it was three months ago, he said. “Even so, the recovery is still expected to be bumpy and drawn out and the outlook remains dependent on successful containment of the virus,” he added.