The Reserve Bank of Australia (RBA) jolted financial markets by cutting interest rates to a new record low, as the central bank strives to counter the adverse economic impact of feeble inflation.
The RBA cut its cash rate by 25 basis points to 1.75 percent. The move was a surprise - only 18 out of 51 analysts polled by Reuters had expected a cut.
The RBA noted that the global economy was growing at a slightly lower pace than previously expected, while Australia's terms of trade also remained lower than what they had been in recent years.
The central bank particularly expressed concern with inflation, which has stayed stubbornly low.