Australian interest rates have been cut to their lowest level in history.
This rate cut now means ANZ's standard variable, owner-occupier interest rate on principal and interest repayments would fall to 5.18%, while investors will pay 5.78%.
Rural Finance Minister David Littleproud said in a statement immediately after the cut was announced that banks should pass on the cut in full to farmers, many of whom are battling drought.
"Mortgage rates for owner occupiers are already around the lowest level since the 1960s and lenders are generally expected to pass on most, if not all, of the cash rate cut to mortgage interest rates", said Lawless.
It will be a cold day in Queensland before the RBA cuts rates below 1.5%.
Consumer Banking, Mike Baird said reduced funding costs have allowed the bank to pass on the full cut.
The Reserve Bank's previous key fear about lowering interest rates - that it could spark another risky increase in already high household debt levels - has also diminished.
"NAB is determined to continue supporting our home loan customers by being a bank they can rely on throughout the lifetime of their loan".
The rate cut is a belated admission that the economy is idling and, with the government intent on removing any fiscal stimulus, the central bank has been forced to fire one of its remaining monetary policy shots despite concerns that it will have nothing left in the locker in the event of a recession. Moreover, an inspiring surprise in Aussie employment change of 28.4K net additions versus estimates of 15K was countered by an unexpected uptick in the unemployment rate from 5.0 percent to 5.2 percent.
"My message to the banks is that, while they are critical pillars of the economy and especially at a time of domestic and global economic challenges, it was important to maintain the flow of credit to households and businesses", Mr Frydenberg said.
"Today's decision to lower the cash rate will help make further inroads into the spare capacity in the economy".
"It will assist with faster progress in reducing unemployment and achieve more assured progress towards the inflation target".
Treasurer Josh Frydenberg met with executives at the four big banks in recent days to urge them to pass on the benefits of a lower rate.
"The public would rightly expect the benefit of any sustained reduction in funding costs are passed on in full". In fact, overnight swaps have priced an increasingly greater probability that the RBA lowers its policy interest rate at its June 4 meeting with the odds climbing from 23.8 percent on May 7 to 99.1 percent today.
Retail sales were down 0.1% in April, after experts had predicted a rise of 0.2%.