Reserve Bank of Australia Cuts Interest Rates by 25 Basis Points

Written April 7, 2009 at 12:35 AM EST by  

The RBA has cut Interest Rates by 25BPS down to 3.00% from the previous 3.25%.  No change from 3.25% was expected.

- Board noted there was scope for modest rate adjustment
- Sees significant support to domestic demand in period ahead
- Capacity utilization expected to fall in 2009
- Demand for credit is weak, labor demand is weakening
- Impact of global stimulus not yet discernible, but should contain downturn over the rest of 2009
- Medium term inflation outlook likely to be lower than in prior 2 years

***The AUD initially sold off in response to the cut only to reverse the “knee-jerk” reaction and get bid across the board…

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