BREAKING NEWS: OZ Dollar Crashes As RBA Delivers $90 Billion To Prop Up Businesses

The Reserve Bank has cut the official cash rate to 0.25 per cent from 0.5 per cent with banks set to have $90 Billion at their disposal to lend to small business in an effort to prevent bankruptcies.

The central bank said it would set up the $90 billion special funding facility for commercial banks to help with their own margin pressures as well as assist small business – similar to an initiative announced in the UK by the Bank of England last week.

epa05960672 A programer shows a sample of decrypting source code in Taipei, Taiwan, 13 May, 2017. According to news reports, a ‘WannaCry’ ransomware cyber attack hits thousands of computers in 99 countries encrypting files from affected computer units and demanding 300 US dollars through bitcoin to decrypt the files. EPA/RITCHIE B. TONGO

The bank said it would buy as many three-year government bonds it needed to ensure the yield on those bonds – regarded as a base cost of borrowing for corporate and government – stayed low at around 0.25 per cent.

The move could be a major stimulus for distributors and retailers who face a double whammy, a shortage of stock due to manufacturing plants in China and Europe unable to manufacture to facilitate orders, and the general downturn in retail sales as conditions in Australia worsen.

Distributors are also facing new pressures as the dollars falls to $0.55 with several distributors telling ChannelNews that they are now anticipating price rises up to 20%.