Australia cuts key interest rate to record low 1.75 percent

[webfact]

Australia cuts key interest rate to record low 1.75 percent

WELLINGTON, New Zealand (AP) — Australia's central bank has cut its benchmark interest rate to a record low 1.75 percent, citing lower-than-expected inflationary pressures.

The Reserve Bank of Australia's board decided Tuesday to cut the cash rate by a quarter percentage point from its previous low of 2 percent. The board last cut rates about one year ago.

Bank Governor Glenn Stevens said in a statement the country's terms-of-trade remained much lower than in recent years. He said that while commodity prices had firmed from recent lows, the improvement followed substantial declines in the last couple of years.

The bank's announcement came just hours before Australia's Treasurer Scott Morrison was due to release his first budget. Morrison has indicated the budget will contain tax cuts for small and medium-sized businesses, designed to increase economic growth.


-- (c) Associated Press 2016-05-03

[Rancid]

What a surprise, following the US and Europe to further destroy savings as a vehicle for retirement. Forces retirees into riskier stock and property markets chasing a return.

Will we hit negative interests rates and also eventually ban cash? Of course the politicians have nice retirement packages already in place...

[BuaBS]

I remember the good old days , when we had double digit rates on AU$ bonds !!

Low interestrates are theft.

[wabothai]

I remember the good old days , when we had double digit rates on AU$ bonds !!

Low interestrates are theft.

They !? let us get used to 0% very slowly to cover up their blunt theft.

[Class C]

Interest rates are at their lowest levels in 5000 years of civilization. Could the RBA kindly explain why ?

[simple1]

Interest rates are at their lowest levels in 5000 years of civilization. Could the RBA kindly explain why ?

RBA claims action taken to address deflation, reduction in consumer confidence and an overvalued AUD. Markets have already reacted with AUD losing some strength. Currently forecast there will be another reduction in interest rates this year.

[ggt]

Low interest rates (even negative rates in some countries for savers) help keep the ponzi scheme going...if interest rates rise...the interest on out-of-control debt will become unpayable...causing the country to go into default and bankruptcy...

The entire world is in a mess...the Japanese have created stimulus money out of thin air...that exceeds 200 times its nations GDP...

Can not see how this will not end badly...

[elgordo38]

Interest rates are at their lowest levels in 5000 years of civilization. Could the RBA kindly explain why ?

Let me try. They governments around the world have mismanaged things over the decades and now they want you to pay for it. Simple.

[Kiwiken]

I asked a very respected Economist Once what would happen when the World woke up and realised we are all paying an over inflated price for everything. His reply is Economists World wide dread the day this happens. Well Ladies and Gents it is coming!

[nev]

Yes we have been told about the economics of over paying for years here on Thaivisa, just read all the threads on the price of a bar girl,

[samran]

I remember the good old days , when we had double digit rates on AU$ bonds !!

Low interestrates are theft.

Actually, high inflation is the real theft of people's money as it loses value while you hold it. People and business can't plan as there is no price stability, forcing the economy to go tits up after every short boom bust cycle which happened every 5 or 6 yearsz

If you want high inflation, move to Zimbabwe. For the rest of is who understand what happened to global economies in the 70s 80s and early 90s I'm thankful that no one has to worry about inflation.

We've has 24 odd years of steady consecutive growth, and low inflation is one of the reasons for it.

Edited May 4, 2016 by samran

[samran]

Interest rates are at their lowest levels in 5000 years of civilization. Could the RBA kindly explain why ?

Independence of the reserve bank and proper monetary policy have killed off inflationary exepectations.

No one walks out the front door each morning expecting prices for everything to go up 12% each year like they did in the 70s.