Australian Interest Rates
Last week the Reserve Bank of Australia slashed interest rates by 100 basis points, in a move to boost the local economy. 
It was the fourth consecutive monthly cut by the RBA, which has sliced a total of 300 basis points off the official rate since September, as inflation fears give way to concern about the impact of slower world economic growth .
Most financial market economists had expected a cut of 75 basis point, however the bank had opted for a big one percentage point cut in October and a repeat was not totally unexpected.
The bank says economic activity's likely to weaken by more than expected, as the global downturn hits Australia's once booming commodity exports.
There are more signs of a slowing housing economy with recent figures showing capital city house prices plunged two per cent in the September quarter. Although it is not all bad, Australian mortgage broker AFG say its Mortgage Index shows that the volume of loans arranged by AFG for first home buyers has increased by 120 per cent in three months.
Australian banks are now under pressure to pass on the full amount of yesterday's official rate cut. Only three lenders have passed on the full cuts, with The Commonwealth Bank, National Australia Bank and non-bank lender Aussie Home Loans all reducing their standard variable home loan rate by one per cent. Other lenders have cut rates by 80 or 85 basis points only.
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