(05 December 2012 – Australia) The Reserve Bank of Australia (RBA) has cut the cash rate by 25 basis points, to 3 percent – the lowest rate since the central bank started setting rates in 1990.Following a raft of weak economic data showing pessimism in the jobs markets, a slowdown in mining and lower retail sales, the RBA gave some good news to home owners with the decision.
RBA governor Glenn Stevens said in a statement that while the full effects of earlier cuts were yet to be observed, ‘‘the board judged at today’s meeting that a further easing in the stance of monetary policy was appropriate now’’.
‘‘This will help to foster sustainable growth in demand and inflation outcomes consistent with the target over time.’’
The first bank to announce a cut to its mortgage rates, just minutes after the RBA decision, was Bank of Queensland, but the lender held onto 5 basis points, reducing its standard variable mortgage rate by just 20 basis points to 6.51 percent.