In its board meeting today, the Reserve Bank of Australia lowered interest rates for the fifth consecutive time since October of last year, by 25 basis points, taking the interest rates down to 3 percent.
RBA Governer Glenn Stevens said in a statement that the interest rates were lowered as a result of a deteriorating economy.
“Sentiment remains fragile… and the contraction in economic activity is affecting asset quality of financial institutions.”
According to Governor Stevens, there has already been a major change in both monetary and fiscal policy in Australia with market and mortgage rates at historically low levels, and business loan rates below average.
As a result of market conditions the board judged that there was “scope for a further modest adjustment to the cash rate.”
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