At Last The Reserve Bank Drops the Official Interest Rate by .25%
The Reserve Bank has cut official interest rate by 0.25 per cent, in its first move downwards in more than four years.
The rate has been at 4.35 per cent since November 2023, with today's announcement bringing it down to 4.1 per cent.
All of Australia’s big four banks – the Commonwealth, NAB, Westpac and the ANZ – confirmed within minutes they would pass the full cut on to borrowers.
That means the long-anticipated cut will save borrowers about $77 a month on a $500,000 mortgage or $92 for those who owe $600,000.
“While today’s policy decision recognises the welcome progress on inflation, the board remains cautious on prospects for further policy easing,” the RBA board said in its post-meeting statement.
“The forecasts published today suggest that, if monetary policy is eased too much too soon, disinflation could stall, and inflation would settle above the midpoint of the target range.”
Most recent inflation data, released at the end of January, had Australia’s trimmed mean (the measure the RBA uses for underlying inflation) for the past six months at 2.7 per cent.
That puts it well within the bank’s required range of 2-3 per cent.