Australia’s central bank has reduced its benchmark interest by a quarter percentage point for a second time this year to 3.85% after inflation fell within a target range.

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,

The Reserve Bank board statement referred to “the heightened level of uncertainty” in the world economy and said it had “considered a severe downside scenario.”