In what was a surprise to everyone, the Reserve Bank of Australia(RBA), they have announced a 1 per cent rate cut at 2:30pm today to lower the Federal cash Rate to 6%. At the time of writing this post, none of the big 4 Australian banks have decided if they will pass the interest savings to consumers.

It is the single biggest rate cut since May 1992.

The RBA is clearly forwarding looking. In light of what’s happening in US and Europe and the worsening of the financial crisis, the last thing the central bank wants is to go through the nightmare their counterparts in US have gone through. I applaud their bold decision. With borrowing costs reportedly to have increased ten times, this piece of news couldn’t have come more timely. Let’s see what happens next…

The AUD/SGD has nosedived to 1.0650 spot at 10:05am (GMT+8). It means it is cheaper now to acquire Aussie properties. On the other hand, those with SGD loans, do watch out for calls from your RM for top-ups for your loans.