Reserve Bank of Australia Lowers Interest Rate
(MENAFN) The Reserve Bank of Australia (RBA) has reduced its benchmark interest rate by 25 basis points, bringing it down to 3.85 percent, the lowest it has been in two years.
This adjustment, made on Tuesday, aligns with market predictions and reflects concerns about the international economic climate and a domestic decline in inflation.
In its official statement, the RBA noted that the risks of inflation rising have decreased.
It emphasized that developments abroad are likely to exert downward pressure on Australia's economic performance.
As the statement explains, "Inflation is in the target band and upside risks appear to have diminished as international developments are expected to weigh on the economy."
The bank expressed concern over continued disturbances in the global economy, attributing some of the instability to trade strategies pursued by the administration of United States Leader Donald Trump, as well as an increasingly unstable geopolitical situation.
These issues have led to a high level of unpredictability surrounding the central economic forecasts.
Apart from international influences, the RBA pointed out signs of improvement within the domestic economy.
According to the statement, "Setting aside overseas developments, private domestic demand appears to have been recovering, real household incomes have picked up and there has been an easing in some measures of financial stress."
Following the rate cut, the Australian dollar depreciated by approximately 0.56 percent against the US dollar, reaching a level of about 1.5572 as of 0720 GMT.
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