Australia cuts key interest rate to record low

  • Australia's central bank cut its benchmark interest rate to a record low on Tuesday in a bid to tackle slowing growth in the country's mining sector.

    The Reserve Bank of Australia (RBA) cut its key rate to 2.75 percent from 3 percent.

    The bank expects investment in the resources sector, one of the country’s biggest drivers of economy growth, to peak this year.

    It added that the rate cut would boost other sectors of the economy and help sustain long-term growth.

    "There has been a strengthening in consumption and a modest firming in dwelling investment, and prospects are for some increase in business investment outside the resources sector over the next year," the central bank said in a statement.

    "These developments, some of which have been assisted by the reductions in interest rates that began 18 months ago, will all be helpful in sustaining growth."

    In recent years, Australia's economy has grown due to the rising demand for its commodities, enabling to ride out the global financial crisis.

    However, as demand from key markets such as China wanes, concerns have arisen over the future growth of Australia’s mining sector.

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