Logo of Phnom Penh Post newspaper Phnom Penh Post - Australia slashes interest rates

Australia slashes interest rates

Content image - Phnom Penh Post
The Reserve Bank of Australia cut the cash rate by a quarter of a point to 0.25 per cent, making it the latest lender-of-last-resort to announce emergency measures. AFP

Australia slashes interest rates

Australia’s central bank cut interest rates to record lows and moved to pump billions into the financial system Thursday, in an emergency bid to pull the economy out of a pandemic-induced free-fall.

The Reserve Bank of Australia cut the cash rate by a quarter of a point to 0.25 per cent, making it the latest lender-of-last-resort to announce emergency measures during the fast-moving crisis.

The bank told markets that rates would remain low “until progress is being made towards full employment”, a clear promise that borrowing will remain cheap for the foreseeable future.

It also said it would intervene in the bond market – a move designed to ensure that the Australian government and business can borrow cheaply to counteract the cost of the crisis.

“The functioning of major government bond markets has been impaired,” bank governor Philip Lowe said in a statement.

“At some point, the virus will be contained and the Australian economy will recover,” he said.

“In the interim, a priority for the Reserve Bank is to support jobs, incomes and businesses, so that when the health crisis recedes, the country is well placed to recover strongly.”

At least Aus$90 billion (US$50 billion) will also be provided to support credit to small and medium-sized businesses.

The coronavirus crisis has crashed equity markets worldwide and is already causing a swathe of job losses.

As whole economies have locked down and demand in many sectors has evaporated, economists have warned it could spark a depression if governments and monetary policy makers do not step in.

MOST VIEWED

  • Seven positive for Covid-19, Hun Sen confirms local transmission

    Prime Minister Hun Sen announced that there has been local community transmission of Covid-19. However, he urged the people not to panic even though the Ministry of Health announced the discovery of seven new cases on Sunday. Among the victims are Chhem Savuth, the director-general

  • Cambodia at ‘most critical moment’, Hun Sen warns

    Prime Minister Hun Sen said the first community transmission of Covid-19 in Cambodia has led the country to the “most critical moment” that warranted urgent, large-scale operations to contain the pandemic. Hun Sen, who confirmed the first local transmission on November 28, said the source of

  • PM confirms community transmission, calls for unity

    Prime Minister Hun Sen has called on the public to stay calm, unite and follow the Ministry of Health guidelines after the wife of a senior official tested positive for Covid-19 in the Kingdom’s first case of community transmission. The case has drawn criticism

  • Over 110 garment factories close

    A government official said on November 22 that at least 110 garment factories had closed in the first nine months of the year and left more than 55,000 workers without jobs – but union leaders worry those numbers could be much higher. Ministry of Labour and Vocational Training undersecretary

  • Singapore group seeks $14M in damages from PPSP over ‘breach of contract’

    Singapore-based Asiatic Group (Holdings) Ltd is seeking a minimum of $14.4 million relief from Cambodia Securities Exchange (CSX)-listed Phnom Penh Special Economic Zone Plc (PPSP) for allegedly breaching a power plant joint venture (JV) agreement. Asiatic Group’s wholly-owned Colben System Pte Ltd and 95 per

  • PM vows to protect Hun family

    Prime Minister Hun Sen has vowed to continue his fight against opposition politicians who he said intend to smash the Hun family. Without naming the politicians but apparently referring to former leaders of the Supreme Court-dissolved Cambodia National Rescue Party (CNRP), Hun Sen said there