Australia cuts rate to record low 0.5% because of virus

Australia’s central bank has cut its benchmark interest rate by a quarter of a percentage point to a record low of 0.5% in response to the economic shock of the new coronavirus

CANBERRA, Australia —
Australia’s central bank on Tuesday cut its benchmark interest rate by a quarter of a percentage point to a record low of 0.5% in response to the economic shock of the new coronavirus.

The reduction at the Reserve Bank of Australia’s monthly meeting is the first since October last year and the fourth since June last year.

Reserve Bank Governor Philip Lowe said his board took the decision to “to support the economy as it responds to the global coronavirus outbreak.”

“The coronavirus has clouded the near-term outlook for the global economy and means that global growth in the first half of 2020 will be lower than earlier expected,” Lowe said in a statement.

Before the COVID-19 outbreak, the slowdown in the global economy that started in 2018 appeared to be coming to an end, he said.

“It is too early to tell how persistent the effects of the coronavirus will be and at what point the global economy will return to an improving path,” Lowe said.