Breaking: RBA cuts Official Cash Rate by 25 bps to 0.25%, AUD/USD bounces


At its emergency March monetary policy meeting held on Thursday, the Reserve Bank of Australia (RBA) cut its official cash rate (OCR) by 25bps to a record low of 0.25%, as widely expected.

The Australian central bank announces a term funding facility for the banking system, with particular support for credit to small and medium-sized businesses.

The bank will buy government bonds in the secondary market across the yield curve, RBA added.

About RBA rate decision

RBA Interest Rate Decision is announced by the Reserve Bank of Australia. If the RBA is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the AUD. Likewise, if the RBA has a dovish view on the Australian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.

FX implications

With the RBA decision on the expected lines, the Australian dollar caught a fresh bid-wave and bounced from near two-decade lows of 0.5515, as the AUD/USD pair regained the 0.5550 levels.

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