Australia’s central bank cuts rates to new low

Canberra, Aug 2 (IANS) Australia's central bank cut the official cash rate to a new record low of 1.5 per cent on Tuesday as inflation "remains quite low" despite the local economy continuing to make necessary adjustments.

Reserve Bank of Australia (RBA) Governor Glen Stevens said the subdued growth in labour costs and low cost pressures globally are meaning inflation will remain quite low for some time.

"Taking all these considerations into account, the Board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting," Stevens said in a statement on Tuesday.

The Australian dollar initially fell to 74.92 US cents on the release, from 75.40 US cents just prior, however by 2.50 p.m., traders shrugged off the decision, with the unit trading at 75.26 US cents.