05.05.201500:38:00UTC+00Australia Lowers Key Rate As Expected

The Reserve Bank of Australia lowered its benchmark interest rate by a quarter point as widely expected by economists.

The policy board of the RBA led by Governor Glenn Stevens on Tuesday decided to cut the cash rate by 25 basis point to 2.00 percent, effective May 6. The board said the inflation outlook provided the space for monetary policy further.

This was the second reduction this year. The bank last reduced the rate by 25 basis points in February.

Policymakers today noted that further depreciation of the Australian dollar seems both likely and necessary, particularly given the significant declines in key commodity prices.