Australia Central Bank Cuts Rates for the first time in more than four years, Flags Economic Uncertains

The reserve bank of Australia on Tuesday Cut Benchmark Interest Rates for the First Time in Over Four Years, joining ranks with Other Major Global Central Banks, AS SOS SOS SOFTENING Information Allowation Allowation Allowation Allowation Allowation Allowation Allowation Allowation Allowation Allowation.

The RBA Cut Rates by 25 Basis Points to 4.10%, According to its statement on tuesdayThis marked the rba’s first Easing Since November 2020, when the Central Bank Cut Its Key Rate to a Record Low, As it battled a Slowing Economy during the Pandemic.

“While Today’s Policy Decision Recognies the Welcome Progress on Inflation, The Board Remains Cautious on Prospects for Furter Policy Easing,” The RBA Board Members Said in the Statement.

The Central Bank Had Held Its Policy Rate Steady at 4.35% SINCE NEVEMBER 2023, Following an extended Period of 13 Rate Hikes to Tame Inflation at Home.

The tuesday decision was in line with market expectations, with government bonds rallying in recent weeks on anticipation of an interest rate cut. The yields on Australian 10-Year Government Bonds Dropped Nearly 20 Basis Points Since Jan. 13 to 4.450% on tuesday, according to lseg data.

The rba has lagged behind major global central banks that kicked off an Easing Cycle Late Last Year.

In its last policy meeting in December, The Central Bank Said it was more confident That Inflation was decliningAnd that might allows it to ease policy at some stage.

Australia’s inflation over the 12 months Through the December Quarter Eased to 2.4%Compared with 2.8% in the 12 months through September Quarter, The Australian Bureau of Statistics Data Showed.

The rba has pegued its medium term inflation target between 2% and 3%. On a Quarter-on -Quarter Basis, The Consumer Price Index Rose 0.2% in the Quarter Ending DecemberSofter than the forecast 0.3%.

One Factor Holding Back The Cash Rate’s Descent has been the strength of the labor market, with Uneprement Rate Hovering Near a Historic Low Level of 4.0% in December.

A Cut in Borrowing costs would also be a shot in the Arm for the labor government which prepares for a tough election this year, Amid Sluggish Economic Growth.

“There are notable uncertainteies about the outlook for domestic economy and inflation. Onsumption is Slower than expected, “RBA Said.

Australian dollar strengthened 0.22% on tuesday to 0.6340 against the US dollar. The ASX 200 Index Extended Losses on Tuesday, Shedding 0.6%.

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