The Reserve Bank of Australia has decided to further cut the cash interest rate to its record low of 0.25 percent. This is to help prevent a recession in the country caused by the corona virus pandemic. The RBA revealed the currency has lost 20 percent this year.
RBA Governor Philip Lowe said the aim of their decision is to help stabilize the economy and manage monetary and fiscal policies to avoid financial disruptions. It is also their goal to help manage the health of the Australian population.
Right now, Lowe pointed out their priority is to support jobs, incomes and business. This will help the country recover strongly when the health crisis is finally resolved. He said this level of interest rate could continue for a longer period.
Australia’s move follows that of other countries. The U.S. Federal Reserve also cut interest rates by a full percentage. New Zealand also did the same by slashing interest rates from 1.00 percent to 0.25 percent and plans to keep it on hold for 12 months.
A qualitative easing program has also been put in place specifically for Australian Government Securities to prevent an economic crisis.
So far, 52 lenders have committed to pass on to their variable customers the full cut. These included the four major banks led by Westpac. The show of support was said to have overwhelming since the first cut in 2019.
Last year, the interest rate was lowered three times in response to a sluggish economy. Sectors that were badly affected included retail sales, construction and business investment. Growth in wages was also slow while unemployment and underemployment went up.
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By Wendy Chamberlain
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With a passion for all things real estate spanning over 20 years, Wendy loves that her role as a Buyers Agent and Sellers Advocate gives her buying and selling clients an experienced voice they can trust when it comes to negotiating to buy or sell something as important as their home or investment. Wendy considers it a privilege to be asked to help others realise such an important goal as home ownership and to be trusted with that honour. Get in touch today via www.wendychamberlain.com.au for a no obligation chat about how Wendy can work with you and help you save time and money to secure your new home sooner.