The Reserve Bank of Australia (RBA) has cut the official cash rate by a quarter of a per cent to 1.75 per cent, in a move that was predicted by approximately 42 percent of economists.
Today’s monetary policy statement by Glenn Stevens pointed to low inflation citing recent data falling to unexpectedly low levels as ongoing subdued growth in labour costs contribute to a lower outlook than previously forecast.
It was a mixed picture for the Australian economy as the central bank noted an improvement in financial markets and commodity prices as the economy continues to rebalance.
However Mr Stevens also highlighted a slowdown in growth, saying that signs were pointing to a more moderate pace of growth through 2016 while labour market indicators have been more mixed of late.
It was conceded that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting.
NAB is the first institute to pass on the rate cut, announcing it will reduce its variable rate for home loans by 0.25 percent.
The Australian Dollar fell below $US0.76 on the news.
