At a meeting on Wednesday, the Reserve Bank Board agreed to the following comprehensive package to support the Australian economy through this challenging period:

• 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. This will be achieved through purchases of Government bonds in the secondary market.
• A three-year funding facility for the banking system, with particular support for credit to small and medium-sized businesses.

The Reserve Bank will also continue to provide liquidity to Australian financial markets by conducting one-month and three-month Repurchase Agreement (repo) operations in its daily market operations until further notice. In addition, the Bank will conduct longer-term repo operations of six-month maturity or longer at least weekly, as long as market conditions warrant.

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.

To view the full statement of Philip Lowe, Governor of the Reserve Bank, please click here.

Published : 19 Mar 2020