Reserve Bank of Australia: RBA cuts interest rates to 2% – as it happened
The blog is about to be over as well. But it’s been a very eventful afternoon with another big move by the RBA, which is still worried that the Australian economy is weak and needs a bit of help. The main developments are:
- The cash rate has been cut to 2% from 2,25%. It has never been lower.
- RBA governor Glenn Stevens thinks there is still ‘spare capacity’ in the economy and with inflation low and stable, he saw the chance for another cut.
- The dollar has seen some volatility since the news at 2.30pm. It fell initially, as usual after a cut, but then spiked to US79c as investors spotted an end to the easing bias in Stevens’ statement. It’s fallen back a bit since though.
- Stevens again played down fears that a cut will fuel the already rampant Sydney housing market. He’ll work with other regulators to contain risks, he said.
- Mortgage holders will be better off if the banks pass on the cut, boosting spending power throughout the economy.
- Bad news for saver but Joe Hockey has as a result ruled out tax rises on super in the budget
- ASX200 share index closed flat.
And that’s it. Thanks for joining us. Have a good evening.