RBA cuts rates to historic 0.25% low

Reserve Bank of Australia interest rates Philip Lowe RBA

19 March 2020
| By Laura Dew |
image
image
expand image

The Reserve Bank of Australia (RBA) has cut rates again from 0.5% to a historic low of 0.25% and announced a ‘comprehensive package’ to prop up the economy.

In a statement from the central bank, it said rates would not be raised until progress was made towards full employment and inflation was sustainably within its 2-3% target range.

The Bank has previously said 0.25% would be the lowest it would go with interest rates.

The four measures announced were:

  • A reduction in the cash rate target to 0.25 per cent;
  • A target for the yield on 3-year Australian Government bonds of around 0.25 per cent;
  • A term funding facility for the banking system, with particular support for credit to small and medium-sized businesses; and
  • Exchange settlement balances at the Reserve Bank will be remunerated at 10 basis points, rather than zero as would have been the case under the previous arrangements.

Governor Philip Lowe said: “The various elements of this package reinforce one another and will help to lower funding costs across the economy and support the provision of credit, especially to small and medium-sized businesses.

“Australia's financial system is resilient and well placed to deal with the effects of the coronavirus. The banking system is well capitalised and is in a strong liquidity position. Substantial financial buffers are available to be drawn down if required to support the economy.

“The Reserve Bank is working closely with the other financial regulators and the Australian Government to help ensure that Australia's financial markets continue to operate effectively and that credit is available to households and businesses.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Interesting. Would be good to know the details of the StrategyOne deal....

4 days 3 hours ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 2 days ago

increased professionalism within the industry - shouldn't that say, FAR register almost halving in the last 24 months he...

4 weeks 1 day ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 4 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

3 days 1 hour ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

2 days 4 hours ago