Welcome to our May newsletter
The Reserve Bank of Australia (RBA) this month cut the official cash rate by 0.5 per cent, the biggest cut seen since the GFC-fuelled one per cent rate reduction in February 2009.
The move, designed to ease monetary policy, brings the official cash rate down to 3.75 per cent, its lowest level since December 2009.
The RBA said the decision was largely due to weaker than expected inflation data as well as ongoing weakness in both the international and domestic economies.
While economic “shocks” appear less prevalent, conditions remain decisively sluggish across the board, with the economy in serious need of a “boost”, RP Data economist Cameron Kusher said, welcoming the rate cut.
“We have seen a lot of softness in the economy of late,” Mr Kusher said. “House prices are down on where they were, retail activity has slumped and headline inflation was just 1.6 per cent for the year.”
Other property and finance commentators were also quick to welcome the RBA Board’s decision.