Australian Reserve Bank cuts cash rate

Sydney, Dec 4 (IANS) The Reserve Bank of Australia Tuesday announced its decision to reduce the cash rate by 25 basis points to 3.0 percent after its December board meeting.

It is the lowest cash rate level since October 2009, the same level as at the peak of the global financial crisis, reported Xinhua.

The decision was widely expected as most economists forecast the move.

Bank Governor Glenn Stevens said the rate reduction would help foster sustainable growth in demand and inflation outcomes consistent with the 2 percent to 3 percent target range over the next year or two.

“In Australia, most indicators available for this meeting suggest that growth has been running close to trend over the past year, led by very large increases in capital spending in the resources sector, while some other sectors have experienced weaker conditions,” Stevens said in a statement Tuesday.

The governor said recent data confirm that the peak in resource investment is approaching.

“Available information suggests that the near-term outlook for non-residential building investment, and investment generally outside the resources sector, remains relatively subdued. Public spending is forecast to be constrained,” he said.

“While the full effects of earlier measures are yet to be observed, the Board judged at today’s meeting that a further easing in the stance of monetary policy was appropriate now.”

IANS 2012-12-04 12:34:06