The Reserve Bank of Australia on Tuesday cut the cash rate to a new record low of 2 per cent, citing ongoing economic weakness for its decision.
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The widely-expected quarter-point reduction, the second in three months, takes lending rates to the lowest point since at least the late 1950s.
The latest round of rate cuts, which began with February's drop to 2.25 per cent, is aimed at spurring business investment outside mining and encouraging the so-called "animal spirits" which create jobs and drive innovation.
However, it could also further fan the flames of the hot Sydney property market and run the risk of creating a bubble.
Tuesday's cut comes just days ahead of the RBA's quarterly statement on monetary policy, in which the bank will detail prevailing weaknesses in the Australian economy such as low commodity prices, the fall-off in capital investment, relatively high unemployment, the slowdown in China, and weak global demand.