Australia's central bank on Tuesday cut its main cash rate by 25 basis points to a two-year low of 3.85% citing a darker global outlook and cooling inflation at home, though it also remained cautious on further easing.

The Reserve Bank of Australia lowered its benchmark cash rate by 0.25 percentage point to 3.85%. Government-bond yields dropped and the Australian dollar weakened. “While recent announcements on tariffs have resulted in a rebound in financial market prices,

Australia’s central bank has cut its policy rate to 3.85% as inflation concerns in the country continue to recede.