The Reserve Bank of Australia Cuts the Cash Rate to 3.6%

• The cut to 3.6% is the third in 2023.
• Inflation in Australia continues to decline.
• The unemployment rate rises to 4.3% in June.

MELBOURNE, Australia — The Reserve Bank of Australia on Tuesday reduced its benchmark cash rate to 3.6%. This is the third rate cut this year.

The central bank lowered its rate from 3.85%, which was reduced from 4.1% in May. This cut follows a decrease from 4.35% at the meeting in February and is the first reduction since July 2020.

The new rate is the lowest since early 2023, and the decrease was anticipated, as inflation continues to decline.

The Reserve Bank regulates interest rates to steer inflation towards a target range between 2% and 3%. In May, annual inflation dropped to 2.1% from 2.4% the previous month.

The trimmed mean measure of underlying inflation, which is the primary indicator for the bank, fell from 2.8% in the March quarter to 2.4% in June.

Inflation has gradually decreased from a peak of 7.8% in the last quarter of 2022.

The bank aims to continue managing inflation without risking recession or significant job losses.

The unemployment rate rose to 4.3% in June from 4.1%, where it remained stable since last summer. In April, unemployment stood at 4.0%.

Tags: Economy