ASX rises, dollar dips after RBA rate cut

Australia’s share market climbed to be more than two per cent higher in the wake of the Reserve Bank’s decision to cut the cash rate to 0.1 per cent.

The ASX200 was 2.21 per cent higher to 6083 points at 1520 AEDT on Tuesday following the central bank’s decision to do more to help the economy amid the coronavirus recession.

The index had been trading at 6059.6 points one minute before the bank’s decision at 1430 AEDT, and rose as high as 6090.8 at 1508 AEDT.

The central bank also reduced its three-year bond yield target rate and its term funding facility rate for banks to 0.10 per cent from 0.25 per cent.

In addition, the Reserve introduced a $100 billion bond program for five to 10 year maturities.

The bank’s board wants to lower the value of the Aussie dollar to make local goods more attractive overseas.

The rate cut had an early impact as the dollar fell from buying 70.63 US cents before the announcement, to 70.31 US cents at 1521 AEDT.

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