Interest rate decision was touch and go, says RBA

The Reserve Bank of Australia (RBA) has revealed that the decision to lower the national cash rate earlier this month was a tough one.

It has released the minutes from its June meeting and they suggested that cuts to interest rates were certainly not a foregone conclusion.

The organisation slashed the official rate by a further 25 points, which followed on from a 50-point reduction in May.

Many businesses and households had been desperately urging the central bank to make changes in order to alleviate the pressure on those who have taken out loans.

There have been calls for even further cuts in the next few months, but this is unlikely unless events in Europe take a turn for the worse.

The minutes did not explicitly state what might happen in the near future, but there were hints that the June reductions might be the last for a while.

According to the RBA: "[These latest cuts] would be providing a measure of stimulus that would be expected to flow through to the domestic economy over the coming months."

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