Australian financial regulators in emergency meeting to discuss coronavirus impact: source

SYDNEY (Reuters) – Australia’s financial regulators will discuss the impact of a new coronavirus outbreak on Australia’s A$2 trillion ($1.3 trillion) economy in an emergency meeting on Monday, a source familiar with the matter told Reuters.

The conference call, involving the country’s prudential regulator, markets watchdog and the central bank, comes as financial markets price in a global policy response to the rapidly spreading epidemic.

A spokeswoman for the Reserve Bank of Australia declined to comment. Spokespeople for Australian Securities and Investments Commission and Australian Prudential Regulation Authority did not immediately respond to requests for comment.

There have been more than 85,000 coronavirus infections worldwide, the majority in China, the World Health Organization said. Outside China, it has spread to 53 countries, with more than 6,000 cases and 86 deaths.

In response, U.S. Federal Chair Jerome Powell said the central bank will “act as appropriate” to support the economy.

The Reserve Bank of Australia (RBA) meets on Tuesday for its monthly interest rate review. Financial futures <0#YIB:> are now implying a 96% chance of a quarter point cut to 0.5% compared with just 18% last week.

A Reuters poll last week found few analysts expected a cut although those views may now be changing.

“The RBA will cut rates on Tuesday to get ahead of the likely slump in both business and consumer confidence in the months ahead,” said Betashares economist David Bassanese, who has changed his forecast for Tuesday’s decision to a quarter-point cut from a hold.

“A follow up rate cut in May is also now anticipated, with quantitative easing now at least a 40% chance in the second half of the year.”

Stock markets plunged last week, with an index of global stocks setting its largest weekly fall since the 2008 financial crisis, and more than $5 trillion wiped off the value of stocks worldwide.

A number of key conferences were canceled around the world, including one with Pope Francis in Italy later this month.

In Australia, a 78-year old man became the first fatality of the virus while a 63-year-old woman returning from Iran became infected in Queensland raising fears of an epidemic in the country.

(This story has been refiled to correct headline to remove extraneous word)

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