Australia Cuts Interest Rates, Signals Further Policy Easing

Australia's central bank cut interest rates on Aug 12 for a third time in 2025 and signaled further policy easing might be needed to meet its inflation and employment goals as the economy lost some momentum.

- 

SYDNEY -

Wrapping up a two-day policy meeting, the Reserve Bank of Australia (RBA) board cut the main cash rate by a quarter point to 3.6 per cent, saying that data suggested core inflation would moderate to around the middle of its 2 per cent to 3 per cent target band, assuming a gradual easing in policy.

Markets had been fully priced for a cut, having been wrong-footed in July when the central bank held steady, given inflation had slowed as desired in the second quarter while unemployment had moved higher.

Governor Michele Bullock would not comment on whether a cash rate of 3.6 per cent was restrictive or not, but said policymakers would decide moves on a meeting-by-meeting basis to ensure the bank met its two mandates of low and stable inflation and full employment.