RBA slashes rates by 1pc

THE Reserve Bank of Australia (RBA) has slashed the official cash rate by 100 basis points to 4.25 per cent following today's monthly board meeting.

The fourth rate cut in as many months means that homeowners will save around $193 a month in repayments on an average mortgage of $300,000, should the retail banks pass on the reduction in full.

Economists had generally tipped a 75 basis point reduction by the central bank.

The Reserve Bank has lowered the cash rate by a savage 300 basis points since September as it tries to prevent the economy from being sucked into a global recession.

The Commonwealth Bank will pass on in full the Reserve Bank's one per cent cut in interest rates, Federal Treasurer Wayne Swan has told parliament.