The Reserve Bank has cut interest rates today by 0.25 per cent.
The official interest rate is now 3.25 per cent. Rates were last this low in
October 2009.
The 25 basis point fall is the fifth rate cut the Reserve Bank has made since
November last year.
Rates have now fallen 1.5 per cent since the current cycle of easing
began.
The cut comes after recent revelations that the domestic economy is slowing
and amidst renewed fears for the health of the global economy.
The Reserve Bank faced a mixed bag of data when it met today including cooled
commodity prices and state and federal budget cuts on the horizon.
"Many economists had been predicting one or two rate cuts by the end of the
year,"
"Everyone was expecting a move on Melbourne Cup day, citing the fact that the
Reserve Bank has moved up or down on the last six Melbourne Cup days. The
central bank opted instead to step in today to stimulate the economy."
When the Reserve Bank next meets it will have the benefit of the September
quarter inflation data, which is due out on October 24.
Each 0.25 per cent drop in interest rates slices about $60 off the monthly
interest cost of an average Australian mortgage.
