RBA lowers interest rates

The Reserve Bank of Australia (RBA) has announced a cut to the official cash rate, reducing it by 0.25 per cent to 4.1 per cent. This decision marks the first rate cut in over four years and comes as a response to the easing inflationary pressures in the Australian economy. In the December quarter, underlying inflation was 3.2 per cent.  

RBA Governor Michele Bullock noted in a press conference that ‘we cannot declare victory yet,’ however inflation had lowered ‘faster than expected’.  

Treasurer Jim Chalmers welcomed the rate cut, noting that it offers hope that the worst of the inflation challenge is behind us. He emphasised that while this move will provide some relief, the government remains focused on addressing the cost-of-living pressures faced by Australians. 

According to the Treasurer, the rate cut is expected to save borrowers approximately $80 a month on a $500,000 mortgage. Major banks have already announced that they will pass on the full rate cut to their customers. 

The RBA Board states its highest priority is to sustainably return inflation to target within a reasonable timeframe.