Australia cuts interest rate to 4.5pc

SYDNEY: Australia's central bank Tuesday cut interest rates to 4.5 percent, the first time they have been lowered in over two years as inflation moderated.

In its first rate cut since April 2009, The Reserve Bank of Australia lowered the rate by 25 basis points amid slowing inflation and fears of a major world economic downturn not borne out so far.

"With overall growth moderate, inflation now likely to be close to target and confidence subdued outside the resources sector, the Board concluded that a more neutral stance of monetary policy would now be consistent with achieving sustainable growth and 2-3 per cent inflation over time," said Glenn Stevens, the bank's governor.