"The board has previously noted that the inflation outlook would afford scope to ease further"
- RBA governor Glenn Stevens
Australian borrowers got their first piece of good news this year, as the Reserve Bank of Australia cut its benchmark interest rate to a record low, pushing down the nation's currency that has damaged manufacturing sector and boosted unemployment. The RBA reduced the overnight cash-rate target by a quarter percentage point to 2.75% down from 3%. Most economists had expected the Australian central bank to leave interest rates steady, as the economy is showing signs of a pick-up. During the previous year, the RBA has cut the cash rate four times in order to boost growth. Even despite another cut, interest rates remain well above rates in other developed countries, meaning it should continue to lend the Aussie Dollar some support.
"The board has previously noted that the inflation outlook would afford scope to ease further," Stevens said. "At today's meeting the board decided to use some of that scope. It judged that a further decline in the cash rate was appropriate to encourage sustainable growth in the economy."
"Lower interest rates are playing a very important part in our economy at the moment, to help us make the transition from resource-sector growth through to non-mining sector growth," Swan told reporters in Canberra today.
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