Tuesday, the Reserve Bank of Australia decided to lower the cash rate by 25 basis points to 3%, effective from April 8. Economists had expected the central bank to hold key interest rate at 3.25%.

The Board judged that there was scope for a further modest adjustment to the cash rate. The stance of monetary policy, together with the substantial fiscal initiatives, will provide significant support to domestic demand over the period ahead, the central bank stated.

RBA Governor, Glenn Stevens said inflation over the medium term is likely to be lower than it has been over the last two years.

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