Australia's RBA cuts key cash rate to 4.5% - First cut since April 2009

Marketwatch

Australia's central bank cut its key cash rate by 25 basis points to 4.5% on Tuesday. The Reserve Bank of Australia's interest-rate setting board said that trade performance is starting to see some effects of a significant slowing in economic activity in Europe. It also said that commodity prices, while still at high levels, have declined over recent months. "It is likely to be some time yet before concerns about the European situation can definitively be laid to rest and the effects of the recent turmoil on confidence may result in a period of precautionary behavior by firms and households," the RBA board said.

Well it’s been a long time coming and is no major surprise as it was largely expected. If the global situation worsens, there will be further cuts.

That’s right Stevens, it will be some time yet before the European situation is resolved – if it is ever resolved. Very unlikely. Then there’s the China slowdown and the global slowdown more broadly. Don’t want to appear panic again do ya Stevens, like ya did in 2008 – 09.

reply to post by surrealist


Aussie, Aussie, Aussie. Oi, Oi, Oi.

reply to post by surrealist


In other words.... the Ausie is getting to strong in the FOREX markets, damaging exports because of the decline of other national currencies. As a consequence... Ausies will have to give up some of their quality of life with monetary depreciation to artificially flush inflation into the economy.

Originally posted by surrealist
Marketwatch

Australia's central bank cut its key cash rate by 25 basis points to 4.5% on Tuesday. The Reserve Bank of Australia's interest-rate setting board said that trade performance is starting to see some effects of a significant slowing in economic activity in Europe. It also said that commodity prices, while still at high levels, have declined over recent months. "It is likely to be some time yet before concerns about the European situation can definitively be laid to rest and the effects of the recent turmoil on confidence may result in a period of precautionary behavior by firms and households," the RBA board said.

Well it’s been a long time coming and is no major surprise as it was largely expected. If the global situation worsens, there will be further cuts.

That’s right Stevens, it will be some time yet before the European situation is resolved – if it is ever resolved. Very unlikely. Then there’s the China slowdown and the global slowdown more broadly. Don’t want to appear panic again do ya Stevens, like ya did in 2008 – 09.

That's positive news for those indebted, and it's encouraging to see smaller and major lenders alike stepping up to the plate and announcing to pass on the rate cuts.

Banks to pass on rate cut

reply to post by surrealist


Australian interest rates are still far too high given what the rest of the world is paying..

Also our house prices are ridiculously high to start with and are obviously most people's main outlay..

.5 would be too big and start to scare those people would
wouldn't outherwise look at international issuse, loss of
confidance in house prices and banking stock. busting
of the housing bubble is necissary but their is going to be
a lot of collateral damage when it busts. as the average morgage
is 300000+ and personal debt levels still too high a recession
or even depression is a likely out come.
The chines underpinning are nice to have and so is the
projected influx of cash for new projects, but china has a big
housing bubble too. if eropean demand for chines good drops
below critical levels (which i think it will) then a lot of chines
unemployment will mean people trying to exit that market quick.
sorry off topic a small cut now seems resonable and it lets
people get in the christmas spirit and buy lots of crap they
don't need, gives the ecconomy a small push. the large
contingency of stimulas will have to be injected at the last minute.
to save a politica headach, which they don't need right now.
I wish turnbul was at the helm of the libs right now, the
point scorringcrap that abbot does will not be helpfull, in the
comming #e storm. at least turnbul would understand it better
than most.