THE Reserve Bank has cut interest rates for the first time in more than two and a half years, bringing relief to households and corporate borrowers.
As widely tipped by economists, the central bank today lowered its key cash rate by 25 basis points to 4.5 per cent.
The move reversed the increased imposed on Melbourne Cup Day last year, the most recent time the RBA has shifted rates.
A survey by Bloomberg found 16 of 27 economists had tipped the bank would slice rates by 25 basis points.
If passed on by commercial banks, today's rate cut will trim mortgage repayments on a typical 25-year, $300,000 home loan by $46 a month.
The Reserve Bank had stoked expectations of a rate cut with officials in recent weeks saying they had room to move if needed to bolster the economy, particularly if inflation figures remained subdued.
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