The Reserve Bank of Australia is set to join its global peers in cutting interest rates and in the wake of the coronavirus.
The move will follow the Reserve Bank of New Zealand decision to cut its official rates by 75 basis points and the US Fed’s decision to cut rates to zero.
Traders in Australia say it is inevitable the RBA will move either today or tomorrow.
The move follows weekend talks in which the central banks co-ordinated the moves for fear that global liquidity would disappear as confusion reins on the extent of the virus.
Traders say in Australia late Friday demand for Australian government bonds disappeared.
The federal government had committed to spending 2 per cent of the country’s GDP to boost the economy forcing the budget into deficit.
This means the government will have to sell more debt.
The RBA is expected to cut at least 25 basis points from its official rates.
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