Australia’s central bank cuts main interest rate to 3.25%

<p>In a surprise move, Australia’s central bank has cut its main interest rate.</p>

Australia's central bank has surprised the markets by slashing its official interest rate, saying global growth was adding pressure to the country's economic outlook.

The Reserve Bank of Australia (RBA) cut the rate down to a three-year low of 3.25 per cent, which is a decrease of one-quarter of a per cent.

This is the first cut to the cost of borrowing made by the central bank since June and it noted the strength of the Australian dollar and weak export prices justified this action.

Slowing growth in China – a major trading partner – in addition to Europe, has had a detrimental impact on order books.

Economists had expected the central bank to wait until inflation figures were announced later this month to make this move.

"The Board judged that, on the back of international developments, the growth outlook for next year looked a little weaker, while inflation was expected to be consistent with the target," RBA governor Glenn Steven stated.

At close of play this morning (October 2nd) the Sydney All Ordinaries Index was stable, finishing nearly 0.1 per cent higher to an index value of 4451.90 points.

Learn all about CFD trading strategies  at City Index.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.