The Reserve Bank of Australia – RBA -has cut interest rates by 0.5 of a per cent. The 50 basis point fall comes on the back of evidence the economy is begining to labor with weaker-than-expected inflation figures released in late April. Australia’s official interest rate is now 3.75 per cent. The cut is the first significant movement by the RBA since the global financial crisis, the central bank indicated that the size of the cut is related to it’s belief that commercial lenders wouldn’t pass on the full reduction.
“A reduction of 50 basis points in the cash rate was in this instance judged to be necassary… in order to deliver the appropriate level of borrowing rates” RBA govenor Glenn Stevens said in a statement.
The Australian dollar took an immediate dive on the news, instantly dropping half a US cent to a little above $US1.035 ::Read the full article »»»»