Australia a Victim of its Own Good Fortune

Australia’s central bank cut its main cash rate by a quarter point to a record low of 2.5 percent on Tuesday as it tries to prepare the economy for life after the mining boom.

The Australian dollar edged up on the news as the market had considered it almost certain the Reserve Bank of Australia (RBA) would cut rates at its monthly policy meeting.

“The Board has previously noted that the inflation outlook could provide some scope to ease policy further, should that be required to support demand,” RBA Governor Glenn Stevens said in a brief statement.

“At today’s meeting, and taking account of recent information on prices and activity, the Board judged that a further decline in the cash rate was appropriate.”


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