RBA cuts rates 0.25 per cent

Official interest rates have been cut by 0.25 percentage points to 4.75 per cent by the Reserve Bank.

The RBA weighed the threat of a weakening world economy against strengthening conditions in the domestic economy in making its decision.

The RBA statement following the release said there was a risk that the rate cut would overheat an already booming housing market in the short term but that the risks from global downturn could pose a bigger threat to our economy in the medium term.

How the rate reduction will affect home loan borrowers