Hot off the press: Reserve Bank cuts cash rate to a record low 1%
In today's Reserve Bank meeting, the RBA has decided to lower the official cash rate by 0.25% for the second consecutive month.
In line with its recent aggressive strategy to stimulate the labour market and boost GDP, the RBA has announced a further rate reduction taking Australia's cash rate to 1%.
There is now a growing school of thought that an August rate reduction could follow if the RBA feels that insufficient inroads have been made to lower unemployment, boost growth in wages and to achieve a satisfactory level of inflation.
With many lenders already passing on the full 0.25 point reduction last month to borrowers, the question now arises as to whether they will again follow suit after today's announcement.
Prior to the meeting today, as recent as yesterday, Treasurer Josh Frydenberg has reiterated the government's stance that financial institutions must 'pass on in full' the benefits of 'sustained reductions' in the banks' cost of funding.
The downside of further cuts to interest rates is the pain being felt in the areas of savings and deposits.
Watch this space.