Interest rates cut by 0.25%
The Reserve Bank of Australia “RBA” cut interest rates by 0.25% today, kicking off what is expected to be a prolonged period of rate reductions.
Economists had widely expected the decision, although some had predicted the Reserve Bank would move more aggressively and cut rates by 0.5 percent. However, further cuts remain on the cards with several economists calling for three further cuts in the coming year.
Analysts at ANZ Bank are tipping that rates will drop to 5.75 percent by mid-2010.
Prime Minister Kevin Rudd, speaking in Parliament shortly after the decision, said the cut was good news for home owners.
"This interest rate decision is welcome, but it is not a day for celebration. Interest rates took a long time to rise, they will take a long time, a long time to come back down, and the road will be a very uneven one,"
Nab, Commonwealth Bank, ANZ and Westpac announced they are cutting rates on variable mortgages by 0.25 percent just minutes after the RBA decision was announced.
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