Reserve Bank of Australia cuts cash rate

Sydney: The Reserve Bank of Australia (RBA) Tuesday announced its decision to lower the cash rate by 25 basis points to 3.25 per cent after its October board meeting.

It is the lowest level of official interest rate in three years, reported Xinhua.

The move follows a quarter of a percentage point reduction in June and a half a percentage point cut in May.

RBA Governor Glenn Stevens said the outlook for the global economic growth had softened over recent months with risks to the outlook still seen to be on the downside.

“Around Asia generally, growth is being dampened by the more moderate Chinese expansion and the weakness in Europe,” he said in a statement released Tuesday.

In Australia, most indicators suggest that growth has been running close to trend, led by very large increases in capital spending in the resources sector, the governor said.

“At today’s meeting, the Board judged that, on the back of international developments, the growth outlook for next year looked a little weaker, while inflation was expected to be consistent with the target,” Stevens said.

“The Board therefore decided that it was appropriate for the stance of monetary policy to be a little more accommodative.”