Australia unexpectedly cuts key interest rate by 75 bps

Reserve Bank of Australia (RBA) Governor Glenn Stevens speaks
at a luncheon in Melbourne June 13, 2008. The Australian dollar recovered
from four-week lows against the U.S. currency on Friday,
finding some lift after Stevens reiterated a tightening monetary policy bias.
REUTERS/Mick Tsikas (AUSTRALIA)
Australia's central bank cut its benchmark interest rate by a larger-than-expected three quarters of a percentage point, the third reduction in as many months, amid evidence global financial turmoil is buffeting the economy.


Australia cuts key interest rate by 75 basis points;
Report and analysis by Susan Li of Bloomberg News
Governor Glenn Stevens lowered the overnight cash rate target to a 3 1/2-year low 5.25 percent in Sydney today, adding to last month's 1 percentage point reduction. Fifteen of 16 economists surveyed by Bloomberg News forecast a half-point cut and one tipped a quarter-point drop.

Falling house prices and retail sales plus October's 14 percent slump in the All Ordinaries stock index, the biggest drop since 1987, have prompted Stevens to undertake the most aggressive round of rate cuts since the economy was last in a recession in 1991. The U.S., China, India, Japan and South Korea all lowered borrowing costs in the past week.

Related Posts :

Central Banks Panic – ECB, BOE and RBA may follow the Fed to cut rates in the next week

Sources :

Bloomberg: Australia Cuts Key Interest Rate by 75 Basis Points (Update3), November 4, 2008 00:38 EST

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