Stock highest interest rate decision by the Reserve Bank of Australia
The Reserve Bank of Australia building in Sydney, Australia, on Monday, September 6, 2021.
David Gray | Bloomberg | Getty Images
Shares in the Asia-Pacific region traded higher on Tuesday ahead of the Reserve Bank of Australia’s interest rate decision.
Japan’s Nikkei 225 recovered from earlier losses to rise 0.46% and Topix rose 0.28%.
Hong Kong’s Hang Seng Index advanced 0.56% in early trade, while mainland China’s Shanghai Composite Index is up 0.4%. The Shenzhen component was much higher.
South Korea’s Kospi is up 0.3% and the KOSDAQ is up 0.92%.
In Australia, the S&P/ASX 200 rose 0.14%.
The Reserve Bank of Australia is expected to raise interest rates by half a point to 2.35%, according to a Reuters poll. The Australian dollar was slightly stronger at $0.6828 in morning trading.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.44%.
On Monday, the People’s Bank of China announced that it would lower the foreign exchange reserve requirement ratio, or the amount of foreign currency reserves that financial institutions must hold, to improve financial institutions’ ability to use foreign exchange funds.
As of September 15, the reserve ratio will drop to 6% from 8%.
“This cut should help increase foreign exchange liquidity and thus reduce the depreciation pressure of the Chinese yuan. While the actual impact on foreign exchange liquidity is minimal… this cut is a strong policy signal that the PBoC is not comfortable with the rapid devaluation of the currency.” Analysts at Goldman Sachs Economics Research Books in a note late Monday.
US markets were closed overnight for a holiday.
In the oil markets, US crude extended its gains from the previous session, while Brent crude fell slightly.