Australian central bank lowers offical interest rates

Thu, 20 Feb 2025

Reserve Bank of Australia cuts interest rates for first time in 4 years

Lola Evans
18 Feb 2025, 15:34 GMT+10

Australian central bank lowers offical interest rates

The last time the RBA cut rates was in November 2020.
“If we don’t get inflation down, interest rates won’t come down, and you’ll be stuck with inflation and high interest rates," the RBA governor said.
Analysts rated the chances of a reduction in rate on Tuesday at 89 percent.

SYDNEY, Australia - The Reserve Bank of Australia lowered official interest rates by 25 basis points to 4.10 percent on Tuesday, the first time such move in more than four years.

The last time the RBA cut rates was in November 2020.

The Reserve Bank governor however warned Australians the fight against inflation was not over yet, and they would need to be patient about more interest rate cuts.

"I understand you are hurting, and I understand mortgage rates have increased a lot … but we need to get inflation down because that is the other thing that is really hurting you," Michele Bullock, the RBA governor said Tuesday.

"If we don't get inflation down, interest rates won't come down, and you'll be stuck with inflation and high interest rates."

"So, we have to be patient. I understand it hurts. But it's really important that we get inflation down," Bullock said.

Analysts rated the chances of a reduction in rate on Tuesday at 89 percent. The Australian dollar actually rose on the news and in European trading was being quoted at 0.6359.

The RBA move was welcomed by Treasurer Jim Chalmers whose government will shortly go to the polls. "This is the soft landing we have been planning for and preparing for but we know there's more work to do," he told reporters Tusday.

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