THE Reserve Bank of Australia has decided to reduce the cash rate by 25 basis points to 3 per cent, following a slowdown in mining activity and lower-than-expected retail sales.

This is the lowest the rate has been since the central bank started setting rates in 1990.

RBA Governor Glenn Stevens says the board judged at today’s meeting that a further easing in the stance of monetary policy “was appropriate now’’.

‘‘This will help to foster sustainable growth in demand and inflation outcomes consistent with the target over time,” he says.

The Real Estate Institute of Australia says today’s announcement is a “great boost for home owners and potential buyers.”