RBA cuts interest rates for the first time since 2016
RBA Governor defends rate cut decision
Reserve Bank Governor Philip Lowe has defended the central bank's decision to cut the official cash rate by 25 basis points to 0.50%, the first reduction in more than four years.
The move was widely expected by economists, but it has been met with some criticism from those who believe it is too little, too late.
In a statement, Lowe said the decision was made in light of the "evolving economic outlook" and the need to support economic growth and employment.
He said the global economy is facing a number of challenges, including the ongoing trade war between the United States and China, and the uncertainty surrounding Brexit.
In Australia, the economy has slowed in recent months, with growth in the first quarter of 2019 coming in at just 0.4%, the weakest pace in a decade.
Lowe said the RBA is forecasting growth to pick up in the second half of 2019, but he warned that there are a number of downside risks, including a further escalation of the trade war.
The rate cut is expected to provide a boost to the economy by making it cheaper for businesses to borrow money and invest.
It is also likely to lead to lower interest rates on mortgages and other loans, which could help to stimulate consumer spending.
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