Australia's central bank has slashed its benchmark interest rate by half a percentage point.
Tuesday's decision by the Reserve Bank of Australia to lower the official cash rate to 3.75 percent follows the release last week of weaker than expected inflation data. Economists had widely predicted a cut of only a quarter percentage point. The last interest rate cut was in December.
The move comes amid a slump in the housing market and lackluster growth in the nation's economy outside the booming mining sector.
Last week, the Australian Bureau of Statistics released figures showing the annual inflation rate to March was 1.6 percent. That is down sharply from 3.1 percent a year earlier. The reserve bank's target inflation rate for the year was 2 to 3 percent.