The Reserve Bank today lowered the cash rate 25 basis points to 1.50%, a historic low point for interest rates in Australia.
In the second cut this year, the Bank lowered the cash rate from 1.75%, citing “difficult conditions” in “a number of emerging market economies”. Australia’s terms of trade “remain much lower than they had been in recent years”.
A statement from the Reserve Bank Governor, Glenn Stevens says “low interest rates have been supporting domestic demand and the lower exchange rate since 2013 is helping the traded sector”.
In what could be construed as a plea to the banks, the statement says: “Financial institutions are in a position to lend for worthwhile purposes.”
Text of media release from Glenn Stevens, Governor of the Reserve Bank of Australia.
Monetary Policy Decision
At its meeting today, the Board decided to lower the cash rate by 25 basis points to 1.50 per cent, effective 3 August 2016. [Read more…]