RBA lowers cash rate by 25 basis points
The Reserve Bank of Australia (RBA) has announced the first interest rate cut of 2011, which will come into effect tomorrow (November 2nd).
It opted to lower the cash rate by 25 basis points, taking it back down to 4.5 per cent, a level it was last at in October 2010.
A statement by governor of the RBA Glenn Stevens observed that while there has been an easing in financial markets, the overall conditions have "remained tighter than normal".
He observed that borrowing rates are still higher than average and that credit growth in the country is subdued.
"The board concluded that a more neutral stance of monetary policy would now be consistent with achieving sustainable growth," Mr Stevens commented.
He explained that the RBA is aiming to achieve an inflation rate of between two and three per cent.
In an interview with ABC radio last month, treasurer Wayne Swan said there is "no excuse" for banks not to mirror a rate cut by the RBA.
Get more information on the latest Reserve Bank interest rates with Mozo.