Australia central bank cuts rates to record-matching lows
Australia's central bank cut interest rates a quarter point to a record-matching low on Tuesday, stepping up efforts to safeguard the rich world's most resilient economy from the risk of recession as a mining boom peaks.
The Reserve Bank of Australia (RBA) cut its main cash rate to 3.0 percent following its monthly policy meeting, bringing the easing since May to 125 basis points and matching the trough hit during the darkest days of the global financial crisis.
"While the full effects of earlier measures are yet to be observed, the Board judged at today's meeting that a further easing in the stance of monetary policy was appropriate now," said the central bank's governor, Glenn Stevens.
"Looking ahead, recent data confirm that the peak in resource investment is approaching. As it does, there will be more scope for some other areas of demand to strengthen."
Financial markets were almost fully priced for an easing given signs the seven- year old bonanza in mining investment is finally likely to crest next year, leaving a hole in growth that needs to be plugged by other sectors of the economy.
The move was so well discounted the local dollar actually firmed a quarter of a cent to $1.0445 on the news.
Yet, investors are still wagering official rates will have to go lower yet to truly stimulate demand among cautious consumers and a lacklustre housing market.
Interbank futures suggest the central bank rate could approach 2.5 percent by the middle of next year,
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