The Reserve Bank of Australia has dropped the cash rate to a new low of 2.0%. It said ongoing economic weakness was the contributor. It cited a weakness in business capital expenditure in mining and non-mining sectors over the coming 12 months. And, an expected drop in public spending. The cut is aimed at motivating innovative businesses to step out and generate more jobs…and encouraging non-mining business investment. In response to this Senior Investment Manager Jasmin Argyrou from Aberdeen Asset Management said the cash rate is unlikely to provide the boost to confidence and spending that it has in previous cycles. The cash rate was last at this record low in the 1950’s.
Source: Sydney Morning Herald