After months of speculation the Reserve Bank of Australia (RBA) has cut the nation’s official interest rate for the first time in four months at its October board meeting.
The central bank has lowered Australia’s key interest rate by 25 basis points to 3.25 per cent, attributing the move to a softer global growth outlook, weaker commodity prices and Australia’s employment market.
RBA governor Glenn Stevens says the outlook for growth in the world economy has softened over recent months with estimates for global GDP being edged down and risks to the outlook still seen to be on the downside.
Governor Stevens also noted economic activity in Europe is contracting, growth in the United States remains modest and growth in China has also slowed.
As a result the RBA judged it was appropriate for the stance of monetary policy to be a little more accommodative.
Australia’s official interest rate now sits at the lowest level since October 2009.
