CANBERRA: The Reserve Bank of Australia has cut its benchmark interest rate to a historic low of 1.75%, the first reduction since May 2015. The bank cited lower-than-expected inflationary pressures for the cut. from the previous rate of 2%,
Data published last week showed inflation is at a record low – well below the target band of 2%-3%. Investors in Australia cheered the bank’s move. The benchmark S&P ASX 200 jumped 2% to close at 5,353.80.
“The board judged 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,” said Reserve Bank of Australia governor Glenn Stevens in a statement.
