During an unscheduled meeting on Thursday 19 March, The Reserve Bank Of Australia created an unprecedented comprehensive package to support the Australian economy through the challenging period of the Coronavirus.

The four elements of the package included:

1. A reduction in the cash rate target to 0.25 per cent. The cash rate will not increase until progress is made towards full employment and inflation sits within the 2–3 per cent target band

2. A target for the yield on 3-year Australian Government bonds of approximately 0.25 per cent 

3. A term funding facility for the banking system, with particular support for credit to small and medium-sized businesses

4. Exchange settlement balances at the Reserve Bank to be remunerated at 10 basis points, rather than zero basis points 

Governor of the RBA Philip Lowe commented that the "various elements of this package reinforce one another and will help to lower funding costs across the economy and support the provision of credit, especially to small and medium-sized businesses."

In response to RBA’s package, The Commonwealth Bank announced:

• 100 bps interest rate reduction for all existing cash-linked small business loans
• 70 bps interest rate reduction in one, two and three year fixed home loan rates for owner occupiers paying principal and interest to 2.29% p.a. (*comparison rate yet to be confirmed)
• 60 bps increase in 12-month term deposits to 1.70% p.a.
• Changes to home loan repayments which will release up to $3.6 bn in cash for Australian households

To date, the ANZ, NAB and Westpac have not announced their response to RBA’s economic package.

Terry Portelli, Managing Director of leading residential sales and marketing agency Red23, welcomed RBA’s package, saying, “ These are unprecedented times and it is critical that our leaders continue to provide support to local industries and small businesses.  This will have a flow on affect to our property industry and those that are wishing to purchase a new home or an investment property. 

As property leaders, we must remain supportive to our developer and builder partners and purchasers and show leadership and empathy as well providing outstanding and flexible service.  At Red23, we will maintain vigilance on the changing daily position the virus is having and will act swiftly with our supportive responses to ensure minimum impact is had for all our stakeholders and purchasers."