From SMH.com.au
Original Source
The Reserve Bank has cut its cash rate by 25 basis points, marking the biggest back-to-back monthly reductions since the depth of the global financial crisis.
The central bank today dropped its key lending rate from 3.75 per cent to 3.5 per cent - its lowest level since November 2009. The onus will now fall on commercial lenders to pass the reduction on to borrowers.
Today’s cut was expected by 13 of 27 economists polled by Bloomberg, with four of them tipping the RBA would repeat May’s surprise 50 basis-point reduction. The rest predicted no change.
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In the accompanying statement, RBA governor Glenn Stevens said "financial market sentiment has deteriorated over the past month".
"At today's meeting, the Board judged that, with modest domestic growth and a weaker and more uncertain international environment, the outlook for inflation afforded scope for a more accommodative stance of monetary policy," he said.
The central bank has now lowered its lending rate four times in its past seven meetings as slowing economic growth gives it more room to spur demand without risking a surge in inflation.
Read more: http://www.smh.com.au/business/rba-cuts-rates-to-35-20120605-1ztil.html#ixzz1wtJN7LrB
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