CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

RBA meeting: interest rates slashed to historic low of 0.75%

In a move that many were expecting, RBA Governor Philip Lowe today announced a 25 basis point cut to Australia’s official cash rate.

Today’s rate decision at a glance

RBA Governor Philip Lowe today announced a 25 basis point cut to interest rates, taking Australia’s official cash rate to a historic low of 0.75%.

Prior to today’s announcement, the official cash rate stood at 1.00%.

This move should come as little surprise to those watching the situation. Indeed, as IG’s market analyst Kyle Rodda wrote this morning, the RBA is:

‘Overwhelmingly expected to cut interest rates today to a new record-low of 0.75%, with market pricing giving that outcome an 80% implied probability.’

Today’s result was essentially a ‘done deal’ – with 20 out of the 26 surveyed economists tipping a rate cut prior to today’s announcement, noted Mr Rodda.

Key points from the RBA’s decision

According to the RBA, today’s 25 basis point cut aims to ‘support employment and income growth and to provide greater confidence that inflation will be consistent with the medium-term target.’

Though Governor Lowe noted that Australia's economy grew slower in the June quarter than previously expected, he also pointed out that the:

‘Low level of interest rates, recent tax cuts, ongoing spending on infrastructure, signs of stabilisation in some established housing markets and a brighter outlook for the resources sector should all support growth’ going forward.

As was true of the RBA’s last interest rate announcement, the Governor also touted the turnaround in Australia’s housing market as a key positive, though also noted that housing credit remains low.

Prior to today’s announcement, the business media speculated that the big four Australian banks would balk at passing on the full-rate cut to consumers.

Currently, members of the big four have yet to comment on such speculation.

Final thoughts: future rate cuts pending?

Finally, and potentially of most interest to investors and consumers were comments from Governor Lowe that:

‘The Board will continue to monitor developments, including in the labour market, and is prepared to ease monetary policy further if needed to support sustainable growth in the economy.’

In response to today's RBA decision, Shane Oliver, Head of Investor Strategy & Chief Economist at AMP Capital, tweeted that:

'We see more cuts in Nov & Feb taking cash rate to 0.25 which will be the bottom.'

It will be interesting to see how events unfold in the meantime.


The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.