//Foreword//
The exchange rate of the Australian dollar against the RMB suddenly plunged,
GDP data fell as the main reason,
The blockade had a huge impact,
The Australian central bank responded again to the interest rate issue,
responded again!
#01:
The exchange rate plummeted,
GDP data dropped sharply
After the exchange rate rose for many consecutive days, the exchange rate of the Australian dollar against the yuan began to suddenly plummet yesterday.
suddenly dropped from the previous highest value of 1:4.828 to today’s 1:4.754.
(Picture source: Sina)
You can see from the exchange rate chart how obvious the downward trend is.
And the trend continues.
The reason why this happens is that is directly related to GDP performance.
Australian Central Bank Governor Philip Lowe pointed out in the latest monetary statement that the blockade caused by the new crown epidemic has had a serious impact on most parts of Australia.
(Picture source: 9news)
He said that Australia was expected to resume its economy early, but everything was interrupted by the sudden outbreak of the epidemic. The months-long blockade caused Australia's GDP data to decline sharply in the third quarter, and in the next few months Australia's unemployment rate will continue to rise during the month.
Affected by this, the Australian dollar exchange rate also experienced significant fluctuations, and the exchange rate against the RMB fell significantly .
This has also been predicted by people.
(Picture source: 9news)
However, the Australian economy will not continue to be decadent. Although the epidemic is affecting most regions, the extent of the impact is uneven. Some regions are facing very difficult conditions, while the economies of other regions continue to be strong. increase.
Coupled with the unblocking of national and domestic borders, the recovery prospects of all walks of life have exceeded expectations. The development of the Australian economy is still promising overall..
As long as the economy recovers, the exchange rate of the Australian dollar against the RMB will resume its upward trend.
#02:
The Australian Central Bank officially announced that interest rates will remain unchanged at 0.1%
In addition to predicting a sharp decline in GDP, the Australian Central Bank also updated its decision on the cash rate.
At this stage, Australia's official cash rate will continue to remain at a historical low of 0.10% .
(Photo source: 9news)
The Australian central bank has previously stated that it will not increase the cash rate until the inflation rate rises to the sustainable target of 2% to 3%.
The current annual inflation rate in Australia is at the level of .8%, which is far beyond the target range of the Reserve Bank of Australia.
(Picture source: 9news)
This is also related to the fact that Australia’s inflation rate has risen too fast in recent times. Therefore, the Australian Central Bank also emphasized that does not rule out the possibility of adjusting the cash interest rate .
In September 2019, the interest rate in Australia was 1%. By October of that year, the interest rate was reduced to 0.75%.
In March 2020, with the outbreak of the epidemic, the Australian Central Bank made two emergency interest rate cuts to stimulate lending. The interest rate was then reduced to 0.25.
Finally, in November 2020, the interest rate was reduced to a historical low of 0.10%.
Compare the Market’s digital banking expert David Ruddiman said new entrants to the property market were paying close attention to changes in the official cash rate.
(Photo source: 9news)
Changes in interest rates have a great impact on the real estate market. Many people hope to implement a protective strategy to prevent the impact of future interest rate increases.This could mean splitting their home loan into a fixed interest tranche and a variable interest tranche, allowing them to repay more at a time when interest rates are at historically low levels in an effort to pay off their home loan faster.
Especially now that the inflation rate exceeds expectations, how the real estate market will develop in the future may require more careful consideration.
Finally
Australia's inflation rate has exceeded expectations. Although the Australian central bank still maintains an interest rate of 0.1% for the time being, it is uncertain how long it will last.
Secondly, it is affected by GDP. Whether the Australian dollar exchange rate has plummeted will improve with the unblocking, which needs to be determined based on future economic development.
