The (RBA) Reserve Bank of Australia cut interest rates by 25 basis points to 4.25 per cent at 2.30pm AEDT yesterday, the second cut in as many months and the first back to back rates drop in almost three years.

Glenn Stevens RBA Governor, in a statement issued with the interest rate cuts announcement discussed “considerable turbulence”and the view that financing conditions had become more difficult.

“The Reserve Bank indicated that it is still concerned about the European economic situation and the prospects of a global slowdown hurting Australia and its export markets,” said economics analyst Ross Greenwood.

Mr Greenwood cautioned consumers not to expect the banks to pass on the full interest rate. The Big 4 banks (CBA, NAB, ANZ and Westpac) will not guarantee that they will pass on the full interest rate cut to customers.