Interest rates fall in direct response to the coronavirus

face medical mask

In short

  1. The RBA cuts interest rates by 0.25% to 0.50%
  2. In the first paragraph of the statement, the central bank states that it "took this decision to support the economy as it responds to the global coronavirus outbreak."
  3. The Australian dollar went up marginally but is still between 65 and 66 cents

AUD to USD exchange rates

TimeOpenLowHigh
Today0.6555
In the last week0.64640.6621
In the last month0.64640.6770

The Reserve Bank of Australia cut official interest rates from 0.75% to a new historic low of 0.50%.

It was in direct response to COVID-19 outbreak and they stated as much in the first paragraph of their statement.

At its meeting today, the Board decided to lower the cash rate by 25 basis points to 0.50 per cent. The Board took this decision to support the economy as it responds to the global coronavirus outbreak.

The coronavirus outbreak overseas is having a significant effect on the Australian economy at present, particularly in the education and travel sectors. The uncertainty that it is creating is also likely to affect domestic spending. As a result, GDP growth in the March quarter is likely to be noticeably weaker than earlier expected.

– Reserve Bank Governor Dr Philip Lowe

The cut was already anticipated by financial markets and was part of the reason the Australian dollar slid on Friday night to a new 11 year low.

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