RBA Drops Rates to Historic Low

RBA Drops Rates to Historic Low

The Reserve Bank has cut interest rates to a record low of 0.1 per cent as the bank's governor confirmed Australia was not out of recession.

The cut to 0.1 per cent is down from the previous record low of 0.25 per cent, which was announced earlier this year, and is not expected to increase for at least three years.

Alongside the drop in the official cash rate, the RBA lowered its three-year bond rate target to 0.1 per cent. The new record-low rate will also apply to the bank's term funding facility.

Key points

• The official cash rate is expected to remain at 0.1 per cent until 2024
• Reserve Bank Governor Philip Lowe says the unemployment rate is likely to peak at 8 per cent and drop to 6 per cent by the end of 2022
• Dr Lowe said the cash rate was very unlikely to drop below zero because it would not help stimulate spending\

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