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Finally, rates pain eases

(Sydney Morning Herald)
Mortgage borrowers got their long-awaited rate relief today after the Reserve Bank cut the interest rate, its first reduction in nearly seven years.

The central bank lowered the cash rate 0.25 of a percentage point to 7% from its 12-year high of 7.25%, in a move that puts pressure on lenders to reduce their rates in response.

”The evidence is that the tight financial conditions, in conjunction with other factors including higher fuel costs and lower asset values, have exerted the needed restraint on demand,” RBA Governor Glenn Stevens said in a statement accompanying the rate cut. ”Indicators of household spending have recorded subdued outcomes over recent months, and credit expansion to both households and businesses has slowed.”

The RBA left open the possibility of more rate cuts to come. More…..

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