The number: The Reserve Bank of Australia cut the official cash rate for the third time this year by 25 basis points to 3.6 per cent as widely expected by the financial market and economists. The vote was a unanimous decision among the nine board members.
What was said: ”With underlying inflation continuing to decline back towards the midpoint of the 2–3 per cent range and labour market conditions easing slightly, as expected, the Board judged that a further easing of monetary policy was appropriate.”
“The Board nevertheless remains cautious about the outlook, particularly given the heightened level of uncertainty about both aggregate demand and potential supply. It noted that monetary policy is well-placed to respond decisively to international developments if they were to have material implications for activity and inflation in Australia.”
Why it matters: The RBA reduced the cash rate in February and May but shocked markets last month when it kept policy on hold, saying it wanted to wait for the quarterly consumer price index data to confirm inflation was sustainably slowing.
What has changed: Domestic inflation for the June quarter came in softer-than-expected and the jobless rate surprisingly ticked up to 4.3 per cent. The US Federal Reserve is expected to resume easing next month.
What’s next: RBA governor Michele Bullock will hold a media conference at 3.30pm which is expected to provide more insights into the board’s decision-making