Published August 13. 2025 11:37 am est
by Richard Fitzgerald Cason
Editor in Chief,
NEWSMOVESMARKETSFOREX ®
- Reserve Bank of Australia decided to cut the cash rate from 3.85% to 3.6% on August 12,2025
- This will mark the third rate cut of the 2025
- Australian dollar experienced a slight depreciation, trading at around 0.6501 against the U.S. dollar
- RBA Central Bank all 9 members of the monetary policy board voted unanimously to cut the cash rate
- CPI data shows inflation at 2.1%
- Chief Economist at Deutsche Bank Phil O’Donaghoe states that RBA’s actions are necessary to support economic growth
Reserve Bank of Australia Cut the Cash rate to 3.6%
The Reserve Bank has cut the cash rate by a quarter of a percentage point to 3.6%, from 3.85%
In a press conference the RBA central Bank all 9 members of the monetary policy board voted unanimously to cut the cash rate.
Inflation is firmly back within the bank’s 2-3% target range, and the economy has suffered a weak start to the year.
RBA revised its GDP growth forecast for 2025 down to 1.7%
The RBA revised its GDP growth forecast for 2025 down to 1.7%, a decrease from the previous estimate of 2.1%.
This adjustment reflects concerns over slower consumer spending and business investment, indicating that the economy may not grow as robustly as expected.
The latest CPI data shows inflation at 2.1%, which is at the lower end of the RBA’s target range of 2-3%.
This decline in inflation is a key factor behind the rate cut, as it suggests that the cost of living pressures are easing.
Chief Economist at Deutsche Bank Phil O’Domaghoe states that Rba’s supporting economic growth and stability
Economist Phil O’Donaghoe, Chief Economist at Deutsche Bank, commented on the RBA’s decision, noting that the unanimous vote for the rate cut reflects a clear consensus among board members.
He noted that the RBA’s actions are necessary to support economic growth and maintain stability in the face of ongoing uncertainties in both domestic and international markets.
The RBA’s decision underscores the delicate balance it must maintain between stimulating growth and managing inflation, as Australia navigates a complex economic landscape
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