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Australia reduces key interest rate

AUSTRALIA'S central bank cut its key interest rate to the lowest level in almost 50 years yesterday, reinforcing fears the global financial crisis has dragged the country into recession.

The cash rate was cut by a quarter percentage point to 3 percent and since September has been slashed a total of four and a quarter percentage points.

It left the rate unchanged last month.

Economists had been divided about whether the Reserve Bank of Australia's board would cut the rate again at its monthly meeting. Australia's unemployment increasing to its highest level in four years in February also caused the bank to cut the rate.

The cut comes after official data showed gross domestic product shrank by 0.5 percent in the last quarter of 2008.


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