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Reserve Bank of Australia cuts cash rate to fight deflation.

The Reserve Bank of Australia has cut the cash rate to a record low of 1.75 per cent in a bid to head off falling prices and an economic downturn.
The Australian dollar, which had risen solidly ahead of the decision, dropped like a stone. It was last trading around US75.92¢, down from just above US77¢.
The cut, the first in a year, came less than a week after a shock drop in core inflation to well below the central bank's 2 per cent to 3 per cent target band.



 

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