After a good financial crisis, with sound finances, robust banks and buoyant Chinese demand for its commodities, the returns that made Australia a magnet for investors are buckling under the weight of negative yields elsewhere.
Foreign funds have poured money into Australia, the only advanced economy to avoid recession after the global crisis, drawn to its booming services sector, agricultural and mineral resources and relatively high interest rates – so much so that they threatened its competitiveness by keeping the local dollar too strong.
That was a major reason the Reserve Bank of Australia (RBA) last week ended an 18-month policy hiatus by cutting rates to an all-time low of 2.25 percent, its resistance worn down by the abundant liquidity made available by central banks across the globe.
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