Australia’s central bank on Tuesday (February 18) reduced its benchmark interest rate for the first time since October 2020 as the nation’s inflation cools.
The Reserve Bank of Australia reduced the cash rate by a quarter percentage point from 4.35% to 4.1% at its first board meeting for the year.
The cut was widely anticipated after
inflation rose only 0.2% in the December quarter and 2.4% for calendar 2024. Annual inflation peaked at 7.8% two years earlier.
The bank manipulates interest rates to keep inflation within a target band of between 2% and 3%.
Unemployment in Australia remained at near-record low levels of 4% in December, up from 3.9% in November.
The rate shift is a welcome development for Prime Minister Anthony Albanese’s centre-left Labor Party government which will seek reelection at elections due by May 17.
(Edited by : Anshul)
First Published: Feb 18, 2025 9:33 AM IST
