Australia central bank cuts key cash rate, but cautious on future moves

(Sharecast News) - Australia's central bank on Tuesday cut its key cash rate for the first time since the start of the Covid-19 pandemic but warned that inflation still posed a threat and future reductions were not a given. The Reserve Bank of Australia cut the cash rate by 25 basis points to 4.1%. RBA governor Michele Bullock said that while the decision "recognises the welcome progress on inflation, the board remains cautious on prospects for further policy easing".

"We have a view that the labour market is tight and also that it has tightened recently," she said, adding that there were still risks that inflation would increase again.

Australia faces a federal election by May this year with both the incumbent Labor government and ultra-conservative Liberal-National Party coalition set to campaign on cost-of-living issues.

Reporting by Frank Prenesti for Sharecast.com