The Reserve Bank of Australia has cut its cash rate 0.25% to 2.75%, the lowest rate since the 1950s.
In a statement, Governor Glenn Stevens said the RBA’s board “judged that a further decline in the cash rate was appropriate to encourage sustainable growth in the economy, consistent with achieving the inflation target.”
The Treasurer, Wayne Swan, said the economy had strong growth, low unemployment and contained inflation. He said there was no comparison between today’s low interest rates and the emergency rates that prevailed during the global financial crisis.
The Shadow Treasurer, Joe Hockey, said the Reserve Bank was showing leadership and doing the “heavy lifting” for the government by responding to a deteriorating economy. He said rates were now beyond emergency levels.
- Listen to Wayne Swan’s remarks (11m) – transcript below
- Listen to Joe Hockey’s remarks (6m)
- Listen to remarks by Peter Anderson, Australian Chamber of Commerce and Industry (4m)
- Interest Rates Since 1990
Text of statement from Reserve Bank Governor Glenn Stevens.
At its meeting today, the Board decided to lower the cash rate by 25 basis points to 2.75 per cent, effective 8 May 2013.
The global economy is likely to record growth a little below trend this year, before picking up next year. Among the major regions, the United States continues on a path of moderate expansion and China’s growth is running at a more sustainable, but still robust, pace. Japan has announced significant new policy initiatives aimed at strengthening demand and ending deflation. The euro area remains in recession. Commodity prices have moderated a little in recent months though they remain high by historical standards.
Financial conditions internationally continue to be very accommodative, with risk spreads reduced, funding conditions for most financial institutions improved and borrowing costs for well-rated corporates and sovereigns exceptionally low. [Read more...]