Official Cash Rate Cut to 4.25%

The Reserve Bank of Australia (RBA) decreased the offical cash rate by another .25 per cent, following its .25 per cent rate cut last month which was the first interest rate movement since November 2010. The RBA reduced the cash rate to 4.25 per cent, toward a more neutral stance – one that is not applying as much restraint on the economy.

The RBA in its accompanying statement said "with overall growth moderate, inflation now likely to be close to target and confidence subdued outside the resources sector, the board concluded that a more neutral stance of monetary policy would now be consistent with achieving sustainable growth and 2-3 percent inflation over time," RBA is now expected to keep rates on hold until the first quarter of next year.