Australia slashes rates to all-time low amid slow growth, job fears

Australia’s central bank cut interest rates for the third time this year amid fears about the flagging domestic economy. (AFP)
Updated 01 October 2019

Australia slashes rates to all-time low amid slow growth, job fears

  • Australia has had 28 years of expansion without recession

SYDNEY: Australia’s central bank cut interest rates for the third time this year on Tuesday in a bid to stimulate a sluggish economy and signaled it was prepared to do more if needed, knocking the local dollar to a one-month low.

The country’s economy has expanded for 28 years without a recession, but risks have intensified over the past year, with growth slowing, inflation lukewarm, the property market subdued and unemployment ticking higher.

The Reserve Bank of Australia’s (RBA) quarter-point cut took the cash rate to an all-time low of just 0.75 percent, leaving little room for more reductions and raising the possibility of unconventional policy easing.

RBA chief Philip Lowe said moves by global central banks to ease monetary policy played a part in the decision as he signaled the need for an extended period of low rates.

Financial futures are now pricing in a 60 percent chance of a fourth cut to 0.5 percent in November, compared with under 30 percent before the latest decision.

Expectations that rates will be lower for longer sent the Australian dollar slipping to $0.6706, its weakest since early September.

“In cutting rates so aggressively this year, the RBA is hoping to generate a stronger labor market, higher wage growth and to stimulate domestic consumption,” said Anthony Doyle, a Sydney-based, cross-asset strategist at Fidelity.

“Fortunately for the RBA, the transmission mechanism of monetary policy is fairly quick in the Australian economy,” he said, noting around 80 percent of mortgages were on variable rates.

The RBA’s back-to-back easings in June and July have so far done little to boost activity outside of the housing market.

Indeed, figures earlier in the day showed home prices across Australia’s capital cities jumped 1.1 percent in September, but approvals to build new homes collapsed to the lowest since 2013.

Economists expect construction-related job losses in coming months which could take the unemployment rate to as high as 5.5 percent from 5.3 percent now and the RBA’s goal of around 4.5 percent.

“The RBA now has only three, or possibly even fewer, more conventional cuts available before they will have to venture into unconventional monetary easing territory — negative rates, QE (quantitative easing), or bond yield targeting,” Rob Carnell, chief Asia-Pacific economist for ING said.


Expo 2020 Dubai: UAE begins one-year countdown with entertainment galore

Updated 20 October 2019

Expo 2020 Dubai: UAE begins one-year countdown with entertainment galore

  • Dubai prepares for eye-catching countdown on Burj Khalifa
  • Live performances from singer Mariah Carey and acclaimed Emirati singer and Expo 2020 ambassador Hussain Al-Jassmi

DUBAI: The seven emirates of the UAE is counting down to the Expo 2020 on Sunday with a number of simultaneous entertainment events across the country’s iconic landmarks, before it buckles down to business on Oct. 20 next year.

The event started with performances from Arab artists Khalifa, Shamma Hamdan, Abri and Funk Radius, Showcase and Jaysus Zain at the main stage. 

The main show will be at the Burj Park with global superstar Mariah Carey, joined by Emirati singer Hussain Al-Jassmi, who is also an official Expo 2020 ambassador. Bollywood actress Shraddah Kapoor will also be there, as the Burj Khalifa lights up for the count down.

The other six emirates are also marking the occasion with free-for-all activities in venues such as the Louvre Abu Dhabi, Al Majaz Waterfront in Sharjah, Ajman Museum, Umm Al Quwain Corniche, Al Qawasim Corniche in Ras Al Khaimah and Fujairah Fort.

The events, Minister of State for International Cooperation and Expo 2020 Director-General Reem Al-Hashimy said, will “offer a window into the once-in-a-lifetime celebration that awaits from October 20, 2020.”

“The next 12 months will see us put the finishing touches to ensure an exceptional World Expo,” she added, in a report by state-run WAM.

The Louvre Abu Dhabi will feature YouTube sensation Sandra Sahi, as well as singers Stephon Lemar, Layla Kardan, the Emirati Trio.

Indian band ROOH, singer and pianist Clarita de Quiroz, Egyptian oud player Rami Zaki and other regional artists are celebrating the count down at Sharjah’s Al Marjaz waterfront.

While the Ajman Museum will host Arabic fusion band, pop-rock musician Hydyy, Emirati soul singer Chakram, poet Storm Fernandes, artist Humaira Hussain and MC Mohammed Enaba.