Australia cuts borrowing rates to historic low as economy slows
- The Reserve Bank of Australia cut rates by 25 basis points to a historic low of 1.25 per cent as the pace of growth slowed to levels not seen since the global financial crisis
- Rising unemployment, low wages, a housing slump and below-target inflation are stoking fears about the health of the economy in Australia
Australia’s central bank lowered the cost of borrowing for the first time in three years on Tuesday, hoping to extend a record 28-year-run without a recession amid stiffening headwinds.
The Reserve Bank of Australia cut rates by 25 basis points to a historic low of 1.25 per cent, as the pace of growth slowed to levels not seen since the global financial crisis.
Australia dodged much of the global economic tumult of the past two decades as Beijing lapped up its vast iron ore, coal and other mineral deposits.
But now rising unemployment, low wages, a housing slump and below-target inflation are stoking fears about the health of the economy in Australia.
The Board took this decision to support employment growth and provide greater confidence that inflation will be consistent with the medium-term target
“The Board took this decision to support employment growth and provide greater confidence that inflation will be consistent with the medium-term target,” Reserve Bank of Australia governor Philip Lowe said in a statement.