The Reserve Bank of Australia (RBA) has cut the official interest rate to its lowest level since 1960, by 25 basis points to 2.5%.
That brings the rate in line with New Zealand's Official Cash Rate, which has been at 2.5% for more than two years.
RBA Governor Glenn Stevens said while the dollar had depreciated by about 15% since early April, it remained at a high level and could fall further to help rebalance growth in the economy, the ABC reported.
Mr Stevens said interest rates would continue to be adjusted as needed, to foster sustainable growth in the economy.
The Australian dollar jumped after the RBA announcement on Tuesday.
