Reserve Bank of Australia Cuts Interest Rate to 3.85% Amid Declining Inflation
The Reserve Bank of Australia lowered its benchmark interest rate to 3.85%, marking the second cut this year as inflation stabilizes.
Summary
In a shift aimed at supporting the economy, Australia's central bank has reduced its benchmark interest rate to 3.85%. This marks the second rate cut of 2025, following a decrease earlier in the year. The move comes as inflation has fallen within the bank's target range, with annual inflation reported at 2.4%. The Reserve Bank of Australia remains cautious due to global uncertainties, including political tensions and potential impacts from recent tariff discussions between the U.S. and China.
Sources (3)
- The Reserve Bank of Australia (RBA) cut the cash rate by 25 basis points to 3.85%, marking the second cut this year as inflation met target levels.
- While inflation shows signs of easing, uncertainties due to geopolitical tensions and global trade policies could impact Australia's economic growth and demand.
- Despite inflationary pressures easing, the RBA remains cautious about the outlook, emphasizing the importance of global economic clarity.
ABC News·2d· "…The rate cut was anticipated, although expectations had declined slightly after the United States and China agreed last week to cut back recent tariff hikes for 90 days, reviving stalled trade between the world two biggest economies."
Associated Press·2d· "…Inflation has gradually declined after it peaked at 7.8% in the last quarter of 2022."