- Glenn Stevens, RBA Governor
The Reserve Bank of Australia cut interest rates to a new low against the backdrop of a deteriorating economic outlook and a stronger exchange rate. The RBA slashed the benchmark cash rate by 25 basis points to 2.0% in an attempt to back up demand, following the surprise decision to keep rates unchanged at 2.25% in April. Today's move marked the second time this year the central bank has eased its monetary policy, but the bank did not indicate whether it considers to loose policy further. Lower interest rates should make the Australian Dollar less attractive to foreign investors, pushing the value down and giving a much-needed support to industries such as tourism, manufacturing, agriculture and higher education.
Meanwhile, the number of Australian home-building permits rose in March, supported by demand for apartments and fuelled by the low interest rate environment. Approvals increased by 2.8% from February, and by 23.6% from the previous year, the Australian Bureau of Statistics said. Separately, ANZ's survey of job advertisements showed a 2.3% uptick in April, a rebound following the first fall in ten months in March. Also, according to the Australian Bureau of Statistics, the nation's trade deficit narrowed a seasonally adjusted 18% to $1.32 billion, following a deficit of $1.61 billion in February, which was revised upwardly from an originally reported $1.26 billion. Both imports and exports declined 2% in the reported month
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