Australia's central bank cuts interest rate for third time this year to 3.6%

MELBOURNE, Australia (AP) — Australia’s central bank on Tuesday reduced its benchmark interest rate by a quarter percentage point for a third time this year to 3.6%, with inflation tamed and economic growth stalling.

The Reserve Bank of Australia reduced its cash rate from 3.85%. The rate was cut from 4.1% in May. The reduction from 4.35% at its February board meeting was Australia’s first rate cut since October 2020.

The new rate is the lowest since March 2023 and the cut was widely anticipated as inflation continues to fall.

The bank adjusts interest rates to steer inflation toward a target band of between 2% and 3%. In May, annual inflation fell to 2.1% from 2.4% a month earlier.

The trimmed mean — a gauge of underlying inflation that is the bank’s preferred measure — fell from