Australian central bank cuts interest rates to new low of 2.5%
SYDNEY (AFP) - Australia's central bank cut interest rates to a new record low of 2.5 per cent on Tuesday, underscoring fears of a major economic slowdown shaping up as a key election battleground.
The Reserve Bank of Australia shaved 25 basis points off the official cash rate to lows not seen since the central bank's 1959 establishment, just weeks ahead of the September 7 national polls.
RBA Governor Glenn Stevens cited recent muted inflation and retail sales data in unveiling the cut, which follows a grim pre-election budget update from the ruling Labor party last week.
"The economy has been growing a bit below trend over the past year. This is expected to continue in the near term as the economy adjusts to lower levels of mining investment," Mr Stevens said.