Reserve Bank of Australia Lowers Interest Rate to 4.1%

The Reserve Bank of Australia (RBA) has cut its policy interest rate by 25 basis points to 4.1%, marking its first reduction since November 2020. The move follows a prolonged tightening cycle that saw rates rise from 0.1% to 4.35% between May 2020 and November 2023.

The RBA had maintained rates for the past nine consecutive meetings, but with inflation easing from its 2022 peak, the central bank sees room for adjustments.

In a statement, the bank said higher interest rates have helped balance supply and demand, though it warned of upside risks to inflation, particularly as labour market data remains unexpectedly strong.

"The labour market may be somewhat tighter than previously thought, creating uncertainties in the economic outlook," the RBA noted.

Despite the cut, the bank signaled a cautious approach moving forward, highlighting ongoing uncertainties in domestic growth and inflation trends.

📊 Key Takeaways:
✔️ First rate cut in over four years
✔️ Inflation easing but risks remain
✔️ Labour market strength could influence future decisions

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