The RBA (Reserve Bank Of Australia) on the 7th May 2013 dropped the official cash rate to 2.75% a 53 year record low. In a statement, RBA governor Glenn Stevens said low inflation allowed the board to make a further reduction to boost economic growth. Compared to other developed countries such as the UK where the cash rate is .50%, and the USA the rate is 0.25%, the RBA still has plenty of room to move Australia's cash rate.
The housing and retail sectors are two of the key non-mining sectors that the RBA will expect to pick up some of the slack from the resources investment approaching its peak. Also the RBA intends to weaken the high Australian dollar, to help Australian manufacturing and export sectors.
When asked in an interview with billionare and Virgin CEO Sir Richard Branson about wether he had confidence in the Australian economy after the interest rate cut, he stated that he would swap the UK economy with the Australian economy anytime.
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