The Reserve Bank of Australia has cut their benchmark interest rates down to an astonishing 5.25%. This is their third cut since September when the rates stood at 7.25%, and economists worldwide have been surprised by the significant cut.

The Reserve Bank of Australia’s decision to cut rates came only days after several other leading banks, including Japan and the US Federal Reserve cut their rates. The bank has said that combined with the lowering of borrowing rates, the government’s fiscal stimulus package and the depreciation of the Australian dollar should boost growth.

Australia has seen a continued growth in the last seventeen years, but economists believe that the country may be in for a shallow recession. Emerging figures have shown that there has been a drop in the retail, housing and manufacturing markets, and the Australian prime minister has warned of a difficult time ahead.

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