Official interest rates have again been slashed – the Reserve Bank of Australia today (4 November) cutting the cash rate by 75 basis points to 5.25 percent, effective tomorrow.
The central bank cited global sharemarket volatility and the sharp depreciation of the Australian dollar over the past month in its reasons for the bigger than expected reduction.
“International economic data have continued to point to significant weakness in the major industrial economies, and there have been further signs that China and other parts of the developing world are slowing as well. These conditions have contributed to further falls in world commodity prices,” RBA Governor, Glenn Stevens, said.
“In Australia, the overall path of economic activity appears until recently to have been close to what the (bank) had expected, with a needed moderation in demand occurring after a period of earlier strength.”
Pieter Bergshoeff, Ledge Finance General Manager Sales & Distribution, said it was now up to all lenders to quickly pass on the rate reduction to home loan and business borrowers, to provide further stimulus to Australia’s economy.