The Reserve Bank of Australia Board of Governors has decided to reduce the reference interest rate of its business by 25 basis points to an historical low of 0.50% as an economic support measure to deal with the impact of the economic crisis. As the agency announced in a statement, it said it had promised to take new measures when necessary.
"The coronavirus has enveloped the short-term outlook for the global economy and hints that growth in the first half of 2020 will be lower than previously expected," said Philip Lowe, the governor of the Australian Central Bank. The banker emphasized that corona is now being evaluated It's too early to say how long the virus's effects will last and to what extent the economy will recover.
"The Security Council will continue to closely monitor the situation, assess the impact of the coronavirus on the economy, and prepare to further relax monetary policy to support the Australian economy." In Australia, Lowe acknowledged that the coronavirus "is having a significant impact", particularly on travel and The education sector expects GDP growth in the first quarter to be "significantly weaker than expected" in addition to the impact on domestic consumption associated with the uncertainty caused by the epidemic.
However, the central bank governor believes that once the corona virus is contained, the Australian economy will resume its upward trend driven by low interest rates, high levels of infrastructure spending and exchange rates. The outlook for the resources sector is weak and the outlook is good, with residential construction and household consumption recovering.