The RBA has cut interest rates by 0.25% in an unexpected move by many.  Now we will wait to see which, if any banks decide to pass on the rate cut, and more importantly how much they may pass on.

The Reserve Bank dropped its benchmark interest rate, after pausing in March, as it battles the global slowdown dragging on the economy.

The central bank cut the key cash rate by 25 basis points to 3%, its lowest level since March 1960. The RBA has chopped 425 basis points since September in an effort to keep the economy from slipping into reverse gear.

Today’s 25-basis-point cut, if passed along in full by the banks, will knock about $46 off the monthly repayment on a $350,000 loan over 25 years.

Many economists had predicted no change before this afternoon’s announcement.