SYDNEY, Aug. 12 (Xinhua) -- Australia's central bank on Tuesday cut its key interest rate by 0.25 percentage points for the third time in 2025.
The Reserve Bank of Australia (RBA) Monetary Policy Board announced that it unanimously decided at a meeting on Tuesday to lower the cash rate target from 3.85 percent to 3.6 percent.
It marks the third cut of 25 basis points since February, when the RBA lowered the interest rate for the first time since 2020, and the lowest cash rate target figure since May 2023.
Tuesday's cut was widely expected by economists after the Monetary Policy Board defied expectations at its previous meeting in July by keeping interest rates on hold despite falling inflation.
Prior to Tuesday's decision, the Australian Broadcasting Corporation (ABC) reported that financial markets were pricing in a 99 percent chance of a 0.25 percentage point cut.
In a statement, the Monetary Policy Board said that inflation has fallen "substantially" since the peak in 2022 but warned of elevated uncertainty in the world economy.
"There is a little more clarity on the scope and scale of U.S. tariffs and policy responses in other countries, suggesting that more extreme outcomes are likely to be avoided. Trade policy developments are nevertheless still expected to have an adverse effect on global economic activity," it said.
Official data released by the Australian Bureau of Statistics (ABS) in July said that Australia's annual rate of inflation was 2.1 percent in the year to the end of second quarter of 2025 and that the annual rate of underlying inflation was 2.7 percent.
The RBA's target range for annual inflation is 2-3 percent.
The Monetary Policy Board said on Tuesday that updated forecasts suggest that underlying inflation will continue to moderate to the midpoint of the target range, with the cash rate assumed to follow a gradual easing path.
The board will next meet at the end of September. ■
