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Australia cuts interest rates to record low of 0.1%

Decision taken to support job creation, recovery of economy amid coronavirus fallout

Riyaz ul Khaliq   | 03.11.2020
Australia cuts interest rates to record low of 0.1%


Australia’s central bank on Tuesday cut interest rates to historic low of 0.1%, the bank said in a policy decision. 

In a statement, the Reserve Bank of Australia said it has decided on a package of further measures to support job creation and the recovery of the Australian economy from the coronavirus pandemic, which has disrupted the global economy.

The cut is down from the previous record low of 0.25% announced earlier this year.

"With Australia facing a period of high unemployment, the Reserve Bank is committed to doing what it can to support the creation of jobs," it said.

The press release, however, added that the country’s recent economic data has been a "bit better than expected and the near-term outlook is better than it was three months ago."

"Even so, the recovery is still expected to be bumpy and drawn out and the outlook remains dependent on successful containment of the virus," the statement added.

The bank further reduced interest rate on Exchange Settlement balances to zero while it will purchase government bonds worth $70 billion of around 5 to 10 years over the next six months.

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