RBA signals rate cut in June as economic growth cools

The Reserve Bank of Australia (RBA), the central bank of Australia, would consider cutting interest rates next month to support the economy, Governor Philip Lowe said on Tuesday.

Mr Lowe said that he urged the country’s newly re-elected government to do its part by slashing income taxes and boosting spending.

“A lower cash rate would support employment growth and bring forward the time when inflation is consistent with the target,” he said in a speech in Brisbane.

“Given this assessment, at our meeting in two weeks’ time, we will consider the case for lower interest rates.”

A cut would be the first since the RBA last easing to a record low 1.50 per cent in August 2016, reports Reuters.

The board members of the central bank were already tilting toward an easing bias, minutes of the central bank’s May policy meeting released earlier showed.

Financial markets are now pricing in an 86 per cent chance of a lower rate in June from around 50 per cent before the minutes. The Australian dollar eased to $0.6894 from $0.6913.