Released 5 June 2012



The Reserve Bank of Australia (RBA) has cut official interest rates for the second month in a row at today's (5 June) board meeting.

The cut of 0.25 per cent sees rates fall to 3.50 per cent.

RBA Governor Glenn Stevens said in a statement the outlook for inflation afforded scope for a more accommodative stance of monetary policy. This combined with modest domestic growth and a weaker and more uncertain international environment directly contributed to the decision.

"Financial market sentiment has deteriorated over the past month," Stevens noted.

He said both households and businesses continue to exhibit a degree of precautionary behaviour, which may continue in the near term.

"As a result of earlier changes to monetary policy, interest rates for borrowers have declined to be a little below their medium-term averages."

Stevens also observed that housing prices had shown some signs of stabilising around the turn of the year, but have recently declined again.

"Generally, the housing market remains subdued."

The decision follows a cut of 50 basis points at the RBA's May meeting.