On Tuesday, Australia's central bank cut its key interest rate for the first time since October 2020 amid low inflation in the country. The Reserve Bank of Australia cut the cash rate by a quarter percentage point from 4.35% to 4.1% at its first board meeting of the year.
The cut had been anticipated after inflation had risen only 0.2% in the December period and 2.4% for the 2024 calendar year. The inflation had been 7.8%, its highest, two years ago. The bank controls the interest rates in order to keep inflation between 2% and 3%.
Australia's unemployment rate fell to a record low of 4% in December, down from 3.9% in November. The change in the rate is a welcome development for Prime Minister Anthony Albanese's left-wing Labor Party government, which will seek re-election in the May 17 election.