RBA Cash Rate Announcement
RBA reduces the official cash rate to a new low of 2.00%
As Australia has recently experienced below trend growth and relatively high unemployment, the Reserve Bank of Australia decided to reduce the cash rate by 25 basis points at today’s board meeting.
What triggered the RBA to cut rates?
- The Reserve Bank’s decision to ease monetary policy was made with the objective of fostering sustainable growth in demand and maintaining inflation within target.
- This lowering of the cash rate has been a result of below-trend growth, high national unemployment and weak domestic demand.
- With a high Australian dollar, few inflationary pressures and plummeting commodity prices, the Reserve Bank opted to slash the official cash rate to 2.00%.
- By lowering the official cost of borrowing, the Reserve Bank hopes to bolster consumer and business confidence. That is, lower rates will mean that households have lower mortgage repayments which they hope will bolster consumer spending.
To calculate your new repayments, click here.