Australia`s central bank slashed its official interest rate by a larger-than-expected 75 basis points Tuesday, bringing it down to 5.25 percent.

The Reserve Bank of Australia (RBA) said a significant reduction in the cash rate was warranted given current global and domestic conditions.

`The Board will continue to monitor developments and make adjustments as needed to promote sustainable growth consistent with achieving the 2-3 percent inflation target over time,` RBA governor Glenn Stevens said in a statement.