Australia’s central bank yesterday lowered the cost of borrowing, slashing interest rates for the third time this year amid fears about the flagging domestic economy.
The Reserve Bank of Australia (RBA) announced that it had cut rates by another 25 basis points to 0.75 percent, a decision that brings the country’s interest rates to a historic low.
The move is part of efforts to extend a record 28-year run without a recession in the face of increasing economic headwinds that include stagnant employment levels, low wage growth and high household debt.
Resource-rich Australia dodged the worst of the financial crisis, but the economy recently recorded its weakest annual growth in a decade, expanding just 1.4 percent in the year to June.
RBA Governor Philip Lowe said the decision to lower the cash rate was designed to “support employment and income growth and to provide greater confidence that inflation will be consistent with the medium-term target.”
“The economy still has spare capacity and lower interest rates will help make inroads into that,” he said in a statement following the bank’s monthly policy meeting.
Lowe has said that an “extended period” of low interest rates would be necessary to achieve full employment and reach the bank’s inflation target, with the bank remaining “prepared to ease monetary policy further if needed.”
Australia is also feeling the effects of US-China trade tensions, which have rattled the global economy as central banks worldwide attempt to offset economic risks by lowering rates.
However, one bright light identified by Lowe was recent signs of a turnaround in the Sydney and Melbourne housing markets after a prolonged slump.
The Australian stock exchange moved slightly higher on the news, with the All Ordinaries reaching above 6,853 in afternoon trade, while one Australian dollar was buying US$0.6728.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to