New Mel­bourne lock­down forces RBA to restart bond pur­chases

The Daily Telegraph - Business - - Business -

◆ Aus­tralia’s cen­tral bank is scram­bling to prop up the coun­try’s econ­omy af­ter fresh Covid-19 out­breaks trig­gered a lock­down in Mel­bourne, writes Rus­sell Lynch.

The Re­serve Bank of Aus­tralia is to restart its bond-buy­ing pro­gramme fol­low­ing a three-month pause, in an at­tempt to pump money into the sys­tem and peg three-year bor­row­ing costs at a lower level.

Gov­er­nor Philip Lowe said sup­port would con­tinue for as long as it was needed. The cen­tral bank has al­ready cut in­ter­est rates to an all-time low of 0.25pc.

Of­fi­cials rushed to pro­vide stim­u­lus af­ter Daniel An­drews, Vic­to­ria’s premier, de­clared a “state of dis­as­ter” and im­posed re­stric­tions on more than 5m cit­i­zens in state cap­i­tal Mel­bourne, in­clud­ing nightly cur­fews and fines of up to A$20,000 (£10,960).

From to­mor­row, cit­i­zens across the rest of the state – which ac­counts for around 25pc of the Aus­tralian econ­omy – must also work from home if they can and only leave to buy food, ex­er­cise or give es­sen­tial care.

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