Australia's Central Bank Cuts Rates Amid Global Economic Uncertainty
Australia's central bank has lowered its benchmark interest rate to 3.85% for the second time this year, responding to inflation's alignment with target ranges. Anticipated but slightly uncertain after U.S. and China tariff agreements, this is the first cut since 2020, amidst global economic and geopolitical uncertainties.
- Country:
- Australia
Australia's central bank has announced a reduction in its benchmark interest rate to 3.85%, marking the second cut this year, as inflation aligns with the target range. This move was widely anticipated, despite some uncertainty following recent U.S.-China tariff agreements intended to restore trade momentum.
The Reserve Bank of Australia lowered the cash rate from 4.1%, a decision unprecedented since October 2020. Bank Governor Michele Bullock explained that while inflation has stabilized within the desired band, global economic uncertainties and internal developments may impact economic growth.
With continuous volatility in financial markets and ongoing geopolitical challenges, the bank forecasts potential impacts on global economic activity, emphasizing the need for clarity in economic policies and trade agreements to mitigate adverse effects.
(With inputs from agencies.)
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