Australia lowers key interest rate to 3 percent

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Associated Press

Posted on December 4, 2012 at 2:02 AM

SYDNEY (AP) — Australia's central bank has cut its benchmark interest rate by a quarter percentage point as uncertainty over the United States' fiscal policy and stubbornly weak conditions in Europe prompt concerns for the Australian economy.

The Reserve Bank of Australia's decision Tuesday to lower the rate to 3 percent marked the bank's fourth rate cut this year and was widely predicted by economists. The last time the rate hit the record low of 3 percent was in 2009 at the height of the global economic crisis.

The bank says the fiscal policy stalemate in Washington, instability in Europe's economy, lower commodity prices and an economic slowdown in China — Australia's biggest export market — led to its decision.

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