Australian Reserve Bank cuts cash rate to 3.5 pct
2012-06-05 12:35:10
The Reserve Bank of Australia (RBA) on Tuesday announced its decision to lower the cash rate by 25 basis points to 3.50 percent after its June board meeting.
The cut follows a 0.5 percent reduction in May, taking the cash rate to its lowest level since November 2009 amid the global financial crisis.
In a statement released on Tuesday, RBA Governor Glenn Stevens said more recent indicators suggest further weakening in Europe and some further moderation in growth in China.
"Conditions in other parts of Asia have largely recovered from the effects of last year's natural disasters, but the ongoing trend is unclear and could be dampened by slower Chinese growth," he said.
Steven said the RBA Board noted that financial market sentiment had deteriorated over the past month.
"Europe's economic and financial prospects have again been clouded by weakening growth, heightened political uncertainty and concerns about fiscal sustainability and the strength of some banks," he said.
He also said the Board noted modest growth continued in the first part of 2012, with significant variation across sectors.
"At today's meeting, the board judged that, with modest domestic growth and a weaker and more uncertain international environment, the outlook for inflation afforded scope for a more accommodative stance of monetary policy," Stevens said.