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Australian funding costs have eased following the government’s announcement that it would guarantee bank deposits and wholesale funding.
According to Bloomberg, the premium charged to exchange floating for fixed rate interest payments in Australia, for a one year period, shrank to 99 basis points this morning.
This compares to 157 basis points on Friday, and reflects the biggest decline in funding costs since 2002.
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The stock market also opened significantly higher today, with the weekend’s G7 meeting and local initiatives seemingly improving investor confidence. The S&P/ASX 200 rose 2.27 per cent to 4050.70.
Published: 13-10-08
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