The central bank of Australia implements monetary easing as it cut interest rates to lessen the impacts of the economic growth slowdown of China due to the coronavirus outbreak.
The Reserve Bank of Australia (RBA) trimmed the cash rate by a quarter percentage point to 0.50%, a move anticipated by market analysts and traders in a survey.
The coronavirus spread “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. The Board is prepared to ease monetary policy further to support the Australian economy,” Reserve Bank Governor Philip Lowe said in a statement.
The latest rate cut places the central bank to one more rate cut left before it reaches the effective lower bound which will mark the Australian economy to unchartered territory.
After the easing, the Australian dollar spiked by 0.4% and currently trades at 65.54 U.S. cents.