Australia cuts rates by more than forecast to 3.75%

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The Reserve Bank of Australia has cut interest rates more than expected because economic conditions were "somewhat weaker" than forecast.

It added that inflation had also moderated in recent months.

The bank cut its key rate to 3.75% from 4.25%. Most analysts were expecting a 0.25 percentage point cut.

The BBC's Phil Mercer in Sydney says the news has taken many by surprise.

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