Australia’s central bank cut its benchmark interest rate to a record low in a boost to Prime Minister Kevin Rudd’s bid for a come-from-behind election win.
Governor Glenn Stevens and his board reduced the overnight cash-rate target by a quarter percentage point to 2.5 percent, the Reserve Bank of Australia said in a statement in Sydney today. Twenty-six of 27 economists surveyed by Bloomberg News predicted the eighth cut since late 2011, while money markets had priced in a reduction as a near certainty.
The easing reflects contained inflation and falling commodity prices, and follows a 13 percent slide in the local dollar in the past three months. Rudd, who called an election for Sept. 7, may benefit politically in a nation where about 90 percent of mortgagees have variable-rate loans, while the opposition has said a cut would reflect a weakening economy.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.