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Interest rate cut to historic low

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The Reserve Bank of Australia has cut interest rates bringing it to a historic low of 1.25 per cent.

Today the RBA announced it will drop the official cash rate by 0.25 per cent.

The Commonwealth Bank and the National Bank of Australia will pass the rate cut in full.

However, ANZ will decrease variable home loan rates by 0.18 per cent and Westpac by 20 per cent.

Westpac Chief Economist Bill Evans tells Ross Greenwood he believes there will be two more rate cuts, bringing the cash rate below one per cent.

“The Aussie dollar will be our first source of support for the economy and then, of course, interest rates can go even lower.”

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Shadow Treasurer Jim Chalmers tells Ross Greenwood the government needs to work to strengthen the economy.

“I think today’s decision by the bank really should be a warning sign to the government.

“We’ve got some real challenges here and it’s not enough for the government to just blame the Labor party.”

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