In a surprising move, the Reserve Bank of Australia cut its overnight interest rate by 0.25% to 3.0%. Expectations called for the bank to keep the policy rate steady at its meeting this afternoon.
Despite mortgage rates that are “at very low levels by historical standards,” the “Board judged that there was scope for further modest adjustment to the cash rate,” the RBA official announcement said.
It may be that this was the last rate cut. “The stance of monetary policy, together with the substantial fiscal initiatives, will provide significant support to domestic demand over the period ahead,” the accompanying statement said.
Markets initially reacted to the surprise move by massively selling the Australian Dollar. Markets faded the initial reaction as the release of the accompanying statement hinted at a halt in further monetary action.