The Reserve Bank cut rates by a full percentage point today, extending the biggest round of reductions since the early 1990s.

The fourth cut in as many months takes the official cash rate to 4.25%, the lowest level since December 2001 when the RBA reduced rates by 25 basis points in the aftermath of the September 11 terrorist attacks.

It is the seventh time in 17 years the RBA has cut rates by 100 basis points.

The Australian