The Reserve Bank of Australia has cut interest rates for the first time since August 2013.
In one of the most closely-watched policy rulings since the global financial crisis, the RBA board lowered the 2.5 per cent cash rate by 25 basis points to a new record low of 2.25 per cent.
The move was designed to further stimulate business activity and household spending in the facing of slowing growth, low commodity prices and sluggish investment.
By lowering the rate at which banks can refinance, the RBA hopes to bring down the cost of consumer, housing and business credit.
This reduction will drive some types of mortgage rates to their lowest level in nearly 50 years.