Aberdeen Australia Equity Fund, Inc. News

Aberdeen Australia Equity Fund, Inc. Announces Payment of Quarterly Distribution

PHILADELPHIA, July 11 PRNewswire-FirstCall — Aberdeen Australia Equity Fund, Inc. (Amex: IAF) (the "Fund"), a closed-end equity fund, today announced that it paid on July 11, 2008, a quarterly distribution of US $0.41 per share to all shareholders of record as of June 30, 2008. For the 12 months to June 30, 2008, the Fund has paid total distributions amounting to US $1.73 per share.

The policy of the Board of Directors is to provide investors with a stable distribution rate. Each quarterly distribution will be paid out of current income, supplemented by realized capital gains and, to the extent necessary, paid-in capital.

The Fund is subject to U.S. corporate, tax and securities laws. Under U.S. tax accounting rules, the amount of distributable income for each fiscal period depends on the actual exchange rates during the entire year between the U.S. dollar and the currencies in which Fund assets are denominated and on the aggregate gains and losses realized by the Fund during the entire year. Therefore the exact amount of distributable income for each fiscal year can only be determined as of the end of the Fund's fiscal year, October 31. However, under the Investment Company Act of 1940, the Fund may be required to indicate the sources of certain distributions to shareholders.

The Fund estimates that the distributions for the fiscal year commencing November 1, 2007, including the distributions paid on July 11, 2008, are comprised of 10% net investment income and 90% realized capital gains. This estimated distribution composition may vary from quarter to quarter because it may be materially impacted by future realized gains and losses on securities and fluctuations in the value of the currencies in which Fund assets are denominated.

In January 2009, a Form 1099-DIV will be sent to shareholders, which will state the amount and composition of distributions and provide information with respect to their appropriate tax treatment for the 2008 calendar year.

The Fund is managed by Aberdeen Asset Management Asia Limited and advised by Aberdeen Asset Management Limited. The Fund's shares trade on the American Stock Exchange under the symbol "IAF".

If you wish to receive this information electronically, please contact InvestorRelations@aberdeen-asset.com www.aberdeeninvestments.com

Aberdeen Asset Management Asia Limited and Aberdeen Asset Management Limited are registered investment advisers under the Investment Advisers Act of 1940.

SOURCE Aberdeen Australia Equity Fund, Inc.

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