Following a two-day policy meeting, the Reserve Bank of Australia board announced that it had reduced the cash rate by 25 basis points. 

Australia’s central bank has lowered its benchmark interest rate for the third time this year, citing slowing economic momentum and tamed inflation.

Following a two-day policy meeting, the Reserve Bank of Australia (RBA) board announced on Tuesday, 12 August, that it had reduced the cash rate by 25 basis points to 3.6% from 3.85%.

The bank uses interest rate changes to keep inflation within its 2%–3% target range.

The decision was widely anticipated by markets as annual inflation fell to 2.1% in May from 2.4% in April, edging closer to the mid-point of the RBA’s 2%–3% target range.

The move follows cuts from 4.35% in February and 4.1% in May, bringing the benchmark rate to its lowest level since March 2023.