The Reserve Bank of Australia has cut interest rates, taking the cash rate below 4 per cent for the first time in two years.
At its May meeting, the RBA’s monetary policy board decided to decrease the cash rate by 0.25 of a percentage point, to 3.85 per cent.
It is the second cut to rates this year, providing some further relief to home loan borrowers after 13 rate hikes between May 2022 and November 2023, when the cash rate was left on hold until a cut in February this year.
After the February board meeting, US President Donald Trump’s “Liberation Day” tariff announcement ignited global trade disputes and rocked financial markets, leading some to forecast even deeper rate cuts, although the ensuing tariff delays saw expectations pared back.
The RBA’s official cash rate was last below 4 per cent in May 2023, before it was raised to 4.1 per cent at the June 2023 meeting.
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