<Breaknews Australia = Cho Mi-young, a financial reporter >
|
▲ The value of the Australian dollar is plummeting to the level 18 years ago. Australia's central bank's successive rate cuts and the announcement of its first-ever quantitative easing are also showing no signs of gaining traction. The picture shows the foreign exchange chart. © 호주브레이크뉴스
|
Reserve Bank of Australia (RBA) has announced its first-ever quantitative easing policy. In addition to the rate cut, attention is being paid to what the government bond-buying card will do to the economic crisis.
"The benchmark rate has been lowered to 0.25% from the previous 0.5%," the RBA said in an extraordinary monetary policy meeting to discuss the Covid-19 response. This is the second rate cut this month alone, following a 0.25% cut on Thursday.
The RBA also announced plans to set a goal of keeping the yield on Australian government bonds for three years at 0.25% from 0.47%, and to start purchasing government bonds for the first time on the 20th. This is the first time that the RBA has taken out a quantitative easing card that was not used when the 2008 financial crisis.
In a separate statement, the RBA said it would buy 15 billion Australian dollars and other asset-backed securities (ABS) over the next 12 months.
"The RBA's actions were more decisive and extensive than the market had expected," said an unnamed Sydney economist. "We will ensure that the financial system will support the real economy and generally help the recovery process."
On the other hand, there are differences. The newly announced RBA's action will help, but it is expected to bring to the fore the pressure of many self-employed people, who are suffering a major setback in their business activities, to pay back their debts, said Erin Gibbs, an analyst at S&P Capital, in an interview.
Meanwhile, countries are joining in quantitative easing this month alone, including a cut in the key interest rate, due to growing concerns over a global recession caused by the Korona19. The European Central Bank earlier said it will launch an emergency asset purchase program worth 750 billion euros.
In addition, the Fed has already lowered its key interest rate to zero and resumed quantitative easing worth $700 billion, with the U.S. Federal Reserve lowering its benchmark interest rate by 1.0 percent on June 15 after it carried out a 0.5 percent p "big cut" on Thursday.
news2020@aubreaknews.com
