In early May, the RBA announced that the official cash rate for Australia was being lowered to 2%. This is off the back of a declining interest rate over the past seven years in the post GFC world to try to increase spending. Essentially, the rationale is the cheaper it is to borrow, the more likely people will do so. In turn, the more money they have, the more they will spend, thus creating an increased demand for goods and services and in turn, economic growth.
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