SYDNEY (Reuters) – Australian businesses and households are well placed to face the “large contraction” in economic activity from the coronavirus crisis though it will test their financial resilience, the country’s central bank said on Thursday.
“Most businesses and households entered this difficult period in good financial health, with large cash and/or equity buffers to help withstand a temporary fall in income,” the Reserve Bank of Australia (RBA) said in its biannual Financial Stability Review.
The RBA highlighted “some pockets of vulnerability” in the household sector as well as in the housing and commercial property markets.
Earlier this week, Fitch Ratings downgraded Australia’s four major banks by one notch to ‘A+’, from ‘AA-‘, reflecting a significant economic shock in the first half of the year due to mobility restrictions.
(Reporting by Swati Pandey; Editing by Shri Navaratnam)
