Australia's Treasurer Frydenberg is expected to announce on Monday, an extension to the government’s existing loan guarantee scheme for small to medium-sized businesses due to expire at the end of December, an Australian media outlet reported.

Key points

“Australian federal government will partially underwrite up to $7bn in new loans for small businesses hit by the Delta wave lockdowns.”

“This will take the scheme to just beyond May 2022.”

“The extended program will see the current 80% government guarantee drop to 50%.”

“Treasury expects on current trends up to 24,000 small businesses could be expected to take up new loans, which are capped at $5m each.”

Market reaction

AUD/USD remains under pressure around 0.7165 so far this Monday, slightly off the lows, helped by the uptick in the S&P 500 futures.