The Australian dollar fell to its weakest level in two months versus the greenback after the Reserve Bank of Australia announced it cut the benchmark interest rate to a record low on Tuesday.
The main lending rate has now been reduced by 25 basis points from 3.0 percent to 2.75 percent. The central bank was under pressure to take steps to stimulate the economy in the wake of recent deteriorating economic data and the country is facing a fading mining boom.
Meanwhile the strong Australian currency is weighing heavily on the resource-rich economy.
In a post-policy meeting statement, RBA governor Glen Stevens said the central bank cut rates in order to encourage sustainable growth in the economy and to be consistent with meeting the central bank’s inflation target.
The Aussie tumbled immediately after the news by as much as 0.5 percent against major peers like the US and Canadian dollar and against the yen. AUDUSD fell to $1.0177, while AUDJPY dropped to 100.82. AUDCAD slid to $1.0252.
The Australian dollar fell to its weakest level in two months versus the greenback after the Reserve Bank of Australia announced it cut the benchmark interest rate to a record low on Tuesday.
The main lending rate has now been reduced by 25 basis points from 3.0 percent to 2.75 percent. The central bank was under pressure to take steps to stimulate the economy in the wake of recent deteriorating economic data and the country is facing a fading mining boom.
Meanwhile the strong Australian currency is weighing heavily on the resource-rich economy.
In a post-policy meeting statement, RBA governor Glen Stevens said the central bank cut rates in order to encourage sustainable growth in the economy and to be consistent with meeting the central bank’s inflation target.
The Aussie tumbled immediately after the news by as much as 0.5 percent against major peers like the US and Canadian dollar and against the yen. AUDUSD fell to $1.0177, while AUDJPY dropped to 100.82. AUDCAD slid to $1.0252.
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