(Bloomberg) — A group of people are being held hostage in a cafe in Sydney’s Martin Place and forced to hold a black flag with Arabic writing against a window.
Armed police cleared the square in the city’s central business district, as Prime Minister Tony Abbott convened Cabinet’s National Security Committee for briefings on the siege and the local dollar fell. Police said they were trying to make contact with people inside the Lindt cafe and urged people in the area to stay indoors and away from open windows.
“This is obviously a deeply concerning incident but all Australians should be reassured that our law enforcement and security agencies are well trained and equipped and are responding in a thorough and professional manner,” Abbott said in a statement.
Australia raised its terrorism alert to the highest level in a decade in September, citing the threat posed by supporters of Islamic State, and days later police carried out their largest anti-terrorism raid, foiling an alleged beheading plot.
As many as 10 staff may be inside the Lindt cafe, which generally has about 30 customers during the mid-morning, Lindt Australia Chief Executive Officer Steve Loane said by telephone.
Qantas Airways Ltd. flights were being diverted around the central business district, but still operating on schedule, the airline said on Twitter today. Pedestrians were blocked from the CBD square, which houses offices for Macquarie Group, the Reserve Bank of Australia and Westpac Banking Corp. The central bank said it’s operating normally.
Channel Seven showed images of people inside the cafe with their arms up pressed against the window and holding a black flag with white lettering. New South Wales police said it was dealing with an armed incident and specialist officers were attempting to contact those within the cafe.
Sky News said the Sydney Opera House was evacuated after a suspicious package was found.
The Australian dollar dropped to a four-year low of 82.05 U.S. cents after the news broke and traded at 82.08 as of 12:16 p.m. in Sydney. Ten-year government bonds rallied, sending the yield down as much as eight basis points to 2.82 percent, a level unseen since July 2012.
The unfolding siege “may help keep the Aussie under pressure,” said Janu Chan, a Sydney-based economist at St. George Bank Ltd. “News around the budget and declining commodity prices are also weighing on the Aussie.”
Martin Place train station has been closed and trains earlier suspended on the Eastern Suburbs line won’t be stopping at the platform, Transport for New South Wales said on its website. Fifty-two bus routes were diverted due to the police operation, the government agency said.
Airspace over central Sydney wasn’t closed and the airport is operating as normal, a spokeswoman for Air Services Australia said by telephone.
An 18-year-old man was shot and killed on Sept. 23 after wounding two counter-terrorism officers with a knife. He stabbed the officers in an unprovoked attack outside a police station, where he was due to be interviewed by police after waving an Islamic State flag inside a shopping center.
The number of Australians identifying themselves as Muslim rose from 281,600 in 2001 to 476,300 by 2011 — about 2.2 percent of the population.
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