SYDNEY, Aug 3 (People’s Daily Online)—The Reserve Bank of Australia (RBA) cut the cash rate by 25 basis points to 1.5% on Aug. 2, taking effect on August 3, 2016. This is the second time RBA has lowered its official rate since it cut the cash rate to 1.75% in May this year.

“The global economy is continuing to grow, at a lower than average pace. Several advanced economies have recorded improved conditions over the past year, but conditions have become more difficult for a number of emerging market economies. Commodity prices are above recent lows, but this follows very substantial declines over the past couple of years,” RBA said in a statement.

“Australia's terms of trade remain much lower than they had been in recent years. Recent data suggest that overall growth of Australia is continuing at a moderate pace, despite a very large decline in business investment. Labour market indicators continue to be somewhat mixed, but are consistent with a modest pace of expansion in employment in the near term.”

Recent data confirm that inflation remains quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.

RBA said taking all these considerations into account, the RBA Board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy. (People’s Daily Online/Mengyi Xu)