Weakening local economy prompts further rate cut

The Reserve Bank has again cut the official cash rate, amid continuing turbulence in global markets and weaker than expected domestic growth. Interest rates were reduced to 3.5 per cent, a 25 basis point drop.

Slowing growth in China and turbulent conditions in European markets were partially responsible for the second cut this year and the fourth since November; however, domestic conditions also motivated the RBA to move again to help stimulate local growth.

Reserve Bank Governor, Glenn Stevens said in a statement issued today current conditions allowed for further movement on rates.

"As a result of earlier changes to monetary policy, interest rates for borrowers have declined to be a little below their medium-term averages. Business credit has increased more strongly in recent months, though credit growth remains modest overall, Mr Stevens said.

"Housing prices had shown some signs of stabilising around the turn of the year, but have recently declined again. Generally, the housing market remains subdued. The exchange rate has declined over recent weeks, reflecting lower commodity prices, heightened risk aversion and expectations of lower interest rates."

Connect with us to receive updates throughout the day:

Like us on Facebok Follow us on Twitter

Dun and Bradstreet AustraliaTop of page Dun & Bradstreet Australia Pty Ltd 2015 | D&B Small Business    *About Us    *Sitemap    *Advertise    *Privacy    *Terms & Conditions