Australia Faces Greatest Output Decrease Since 1930s Amid COVID-19 Pandemic – Central Bank

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MOSCOW (Sputnik) – Australia is likely to see the biggest contraction of output and income since the 1930s due to the restrictions imposed amid the COVID-19 pandemic, Philip Lowe, the head of the Reserve Bank of Australia (RBA) said on Tuesday.

He predicted that national output would probably decrease by 10 percent in the year’s first half, with total work hours declining by 20 percent and the unemployment rate hovering at 10 percent by June.

He then went on to elaborate on the RBA response, which consists of a cash rate reduction to 25 basis points, the introduction of three-year government bonds, the start of a Term Funding Facility — which allows deposit-taking institutions to receive RBA funding at 25 basis points —the usage of daily open market operations to ensure the financial system’s liquidity, and modifying the interest rate corridor system “so that balances held in Exchange Settlement Accounts at the Reserve Bank earn 10 basis points, rather than zero.”

There have been 6,645 confirmed COVID-19 cases in Australia, with 71 fatalities, according to the country’s Department of Health.

On March 18, Australia declared a biosecurity emergency and later imposed social distancing rules and announced closing places of social gathering.

Sourse: sputniknews.com

Australia Faces Greatest Output Decrease Since 1930s Amid COVID-19 Pandemic – Central Bank

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