The Reserve Bank of Australia (RBA) cut its benchmark interest rate to an all-time low today (May 5), citing the need for a cheaper currency to offset the impact of falling commodity prices.
The central bank lowered the 'cash rate', which it uses to guide overnight rates in the money market, by 25 basis points, to 2%. The cut takes effect from tomorrow.
In the aftermath of the decision the Australian dollar jumped by 1.7% against the US dollar - possibly a response to a change in RBA guidance.
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