Reserve Bank of Australia Official Cash Rate Cut to Record Low of 0.50%
March 3, 2020
The Reserve Bank of Australia’s official cash rate was sliced 25 basis points to a new record low of 0.50%, and commercial banks have been quick to pass on the easing with prime rate reductions. There have been ten OCR cuts of 25 basis points since May 2013. Today’s move follows three cuts last year done in June, July and October. RBA Governor Lowe’s statement explaining today’s decision concedes that growth in the first half of 2020 will be weaker than expected previously and observes the extreme volatility of financial markets lately including record low long-term interest rates. He concedes not knowing the duration of the impact from the coronavirus, and says that the easing is meant to support employment as well as GDP growth in the face of the pandemic. The statement concludes, “the Board is prepared to ease monetary policy further to support the Australian economy.”
Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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