The Reserve Bank is expected to cut the cash rate to a record-low 0.25 per cent on Thursday and launch its first-ever quantitative easing program to offset the escalating mayhem of the COVID-19 pandemic.
The Reserve Bank of Australia will make the unscheduled announcement on monetary policy at 1430 AEDT and governor Philip Lowe will follow up with a speech at 1600 AEDT.
Economists have widely tipped the RBA will bring forward the 0.25 percentage point cut that was expected in April.
The RBA already reduced the cash rate to 0.5 per cent this month in a bid to buttress the economy against the impact of the coronavirus.
Each of the big four banks passed on that rate cut in full to customers.
Global stock markets have been hammered and an increasing number of companies are cutting operations and withdrawing earnings guidance as travel bans and social quarantining measures tighten.
Prime Minister Scott Morrison says the virus could disrupt daily life in Australia for the next six months.
Unemployment surprisingly eased to 5.1 per cent in February but many expect it to spike as companies slash jobs and large parts of the country shut down.
The RBA stands ready to detail its QE program on Thursday – where it would buy Australian government bonds from banks in order to boost cash supply and encourage lending and investment.
The RBA has already said rates will not go below its lower boundary of 0.25 per cent.
Central banks, governments and regulators across the globe have stepped up this week to cushion the economic impact of the coronavirus.
The European Central Bank launched a 750 billion euro ($A1.4 trillion) bond purchase overnight, while the White House has proposed a $US1 trillion ($A1.7 trillion) stimulus package to help prop up its economy.
Prime Minister Scott Morrison has flagged another round of economic stimulus measures on top of a $17.6 billion package announced last week.
This includes a $715 million assistance package for airlines that will give the carriers relief from airport fees and other aviation industry charges.
Meanwhile, the RBA has been flooding the system with cash all week as the economic fallout from the coronavirus causes economic turmoil.
The RBA already on Thursday used its daily money market operation to pump a record $12.7 billion into the banking system in a bid to ease liquidity constraints in a stressed bond market.
The Aussie dollar fell sharply to 57.02 US cents overnight, its lowest in 23 years.
AAP
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