World Economy

Low Rates Help Australia Economy

Low Rates Help Australia EconomyLow Rates Help Australia Economy

Australia’s record-low interest rates are helping the economy weather a plunge in resource investment, the central bank said after leaving borrowing costs unchanged at 1.5% this month, Bloomberg reported. The economy is also enjoying an unexpected fillip from a 30% jump in the price of commodity exports compared with their trough earlier in the year, the Reserve Bank of Australia said in the minutes of its Sept. 6 policy meeting in Sydney Tuesday. The bank cited Chinese high-cost producers reducing their output of bulk commodities for the spurt in prices. Australia expanded at “around estimates of potential growth over the first half of 2016, despite further large falls in business investment,” the RBA said. “Interest-sensitive sectors of the economy were being supported by accommodative monetary policy,” it said, while reiterating a rebound in the currency could complicate adjustment to service-industry growth. The Australian dollar was little changed after the report, buying 75.42 US cents in Sydney, compared with 75.45 cents before its release.