Australia's central bank has cut the cash rate to a new record low, which it hopes will stimulate a sluggish economy.

Some economists believe further cuts are possible, though not in the next few months.

The RBA's 25 basis point cash rate cut to 2.5 per cent was quickly passed on by National Australia Bank and Commonwealth Bank, while Westpac will cut by 28 basis points.

The RBA cited below average growth and moderating commodity prices for its widely-expected cut.

In a statement accompanying the decision, RBA governor Glenn Stevens said growth was still below trend.

"This is expected to continue in the near term as the economy adjusts to lower levels of mining investment. The unemployment rate has edged higher," he said.

But Mr Stevens said there was a "reasonable prospect" of growth picking up in 2014.

He also noted that the Australian dollar has fallen 15 per cent since April, but said it was still quite high.

"It is possible that the exchange rate will depreciate further over time, which would help to foster a rebalancing of growth in the economy," he said.

JP Morgan chief economist Stephen Walters said the RBA statement was unexpectedly bland, with little clue as to what triggered the cut or whether more cuts were on the cards.

Indices:

The Australian All Ordinaries Index has moved down decreasing -1.4% since closing last Friday to 01:20 pm today. 

The rest of the world as measured by the MSCI index increased +3.6% in A$ from closing last Friday to end of trade Thursday.

Have a great weekend,

The team at IPS