The Reserve Bank of Australia has today cut interest rates for the first time in a year by 25 basis points to 1.75 per cent to help fight falling prices and an economic downturn.
Within minutes of the announcement the NAB has stated that it will pass on the 25 basis points reduction in full.
For homeowners the interest rate cut will mean a saving of $72 a month on a $500,000 loan, bringing the average standard variable home loan rate down to 4.52 per cent according to Canstar.
RBA governor Glenn Stevens said the decision was based on last week’s surprisingly weak inflation read-out.
“Inflation has been quite low for some time and recent data were unexpectedly low,” he said in a statement.
“While the quarterly data contain some temporary factors, these results, together with ongoing very subdued growth in labour costs and very low cost pressures elsewhere in the world, point to a lower outlook for inflation than previously forecast,” he said.
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