For the first time in 17 months, the Reserve Bank of Australia have cut interest rates - taking the cash rate down to 2.25 per cent. The 0.25 per cent cut sees rates hit a record low, and comes after rates remained stable on 2.50 per cent, the longest period of cash rates remaining the same in Australian history, according to the ABC. The rate has not dipped below 2.25 per cent since the RBA started targeting inflation after it gained independence in the 1990s. The rate cut saw the Australian dollar drop from 78.18 US cents to 76.65 just after the announcement at 2.35pm. Scroll down for video . Reserve Bank of Australia have cut interest rates, taking the cash rate down to 2.25 per cent . If the cut is fully passed on it will take the standard variable mortgage rate down to 5.7 per cent, which means repayments on a $400,000 mortgage will drop by $60 a month on average. Treasurer Joe Hockey said the cut to interest rates was good news for business and households. The below figures indicate the loan amount, current monthly repayment and average savings. For example if you have a $100,000 mortgage and currently pay $626.09 per month you will save around $15.16 per month. This assumes 25-year standard variable rate loan at an average new interest rate of 5.7 per cent. 'This is good news for Australian families and it's good news for Australian business,' Mr Hockey said in Canberra. 'The government is working hard to take the pressure off interest rates by keeping inflation low.' Mr Hockey said combined with a fall in petrol prices Australians had received the equivalent of a three-quarter of one per cent cut in interest rates. The treasurer said the Reserve Bank had 'more room to move'. Mr Hockey said the rates decision would lift business and consumer confidence. 'The shackles are off the Australian economy,' he said. 'I say to Australian business ... go out there, have a go, employ more Australians because the costs of doing business are down.' The treasurer said he expected the banks to pass on the cut immediately across the credit spectrum and not just limit it to home loans. An International Monetary Fund report due out within days would show global economic headwinds remain of concern, he said. Treasurer Joe Hockey, pictured on Monday, said the cut to interest rates was good news for business and households . Australian National Retailers' Association (ANRA) CEO Anna McPhee echoed the treasurers sentiments,. 'The retail sector welcomes the sensible approach taken by the RBA today in lowering the cash rate to a new record low,'. 'Recent falls in fuel prices have had a positive impact on household budgets and the RBA's willingness to lower the cash rate and encourage growth will provide important support to consumer confidence. 'The latest sentiment reading suggests consumers need to feel more confident about a range of economic factors before we see further improvements to activity in the retail sector and reap the recurring benefits this delivers to the economy more broadly,' Ms McPhee added.
The Reserve Bank of Australia have cut interest rates by 0.25 per cent .
This will take the cash rate to 2.25 per cent .
The drop is a record low and the rate has not ever dipped below this .
If passed on in full, repayments on a $400,000 mortgage will drop by $60 per month .
For the first time in 17 months, the Reserve Bank of Australia have cut interest rates - taking the cash rate down to 2.25 per cent. The 0.25 per cent cut sees rates hit a record low, and comes after rates remained stable on 2.50 per cent, the longest period of cash rates remaining the same in Australian history, according to the ABC. The rate has not dipped below 2.25 per cent since the RBA started targeting inflation after it gained independence in the 1990s. The rate cut saw the Australian dollar drop from 78.18 US cents to 76.65 just after the announcement at 2.35pm. Scroll down for video . Reserve Bank of Australia have cut interest rates, taking the cash rate down to 2.25 per cent . If the cut is fully passed on it will take the standard variable mortgage rate down to 5.7 per cent, which means repayments on a $400,000 mortgage will drop by $60 a month on average. Treasurer Joe Hockey said the cut to interest rates was good news for business and households. The below figures indicate the loan amount, current monthly repayment and average savings. For example if you have a $100,000 mortgage and currently pay $626.09 per month you will save around $15.16 per month. This assumes 25-year standard variable rate loan at an average new interest rate of 5.7 per cent. 'This is good news for Australian families and it's good news for Australian business,' Mr Hockey said in Canberra. 'The government is working hard to take the pressure off interest rates by keeping inflation low.' Mr Hockey said combined with a fall in petrol prices Australians had received the equivalent of a three-quarter of one per cent cut in interest rates. The treasurer said the Reserve Bank had 'more room to move'. Mr Hockey said the rates decision would lift business and consumer confidence. 'The shackles are off the Australian economy,' he said. 'I say to Australian business ... go out there, have a go, employ more Australians because the costs of doing business are down.' The treasurer said he expected the banks to pass on the cut immediately across the credit spectrum and not just limit it to home loans. An International Monetary Fund report due out within days would show global economic headwinds remain of concern, he said. Treasurer Joe Hockey, pictured on Monday, said the cut to interest rates was good news for business and households . Australian National Retailers' Association (ANRA) CEO Anna McPhee echoed the treasurers sentiments,. 'The retail sector welcomes the sensible approach taken by the RBA today in lowering the cash rate to a new record low,'. 'Recent falls in fuel prices have had a positive impact on household budgets and the RBA's willingness to lower the cash rate and encourage growth will provide important support to consumer confidence. 'The latest sentiment reading suggests consumers need to feel more confident about a range of economic factors before we see further improvements to activity in the retail sector and reap the recurring benefits this delivers to the economy more broadly,' Ms McPhee added.
of Australia have cut interest rates - taking the cash rate down to 2.25 per cent. The 0.25 per cent cut sees rates hit a record low, and comes rate has not dipped below 2.25 per cent since the have cut interest rates, taking the cash rate passed on it will take the standard variable repayments on a $400,000 mortgage will drop by