The Reserve Bank of Australia has dropped the official cash rate to 2.75 basis points after its Tuesday meeting earlier this week.

In his statement issued this week, Governor Glenn Stevens said that continued below trend global growth had acted as the principal reason behind the RBA’s decision to cut the rates.

“The global economy is likely to record growth a little below trend this year, before picking up next year. Among the major regions, the United States continues on a path of moderate expansion and China's growth is running at a more sustainable, but still robust, pace,” Mr Stevens said.

Despite the lower than trend growth, Mr Stevens said that global financial conditions continue to be ‘very accommodative’, with risk spreads down, funding conditions improved and borrowing costs for well-rated corporates and sovereigns ‘exceptionally low’.

“Growth in Australia was close to trend in 2012 overall, but was a bit below trend in the second half of the year, and this appears to have continued into 2013. Employment has continued to grow but more slowly than the labour force, so that the rate of unemployment has increased a little, though it remains relatively low,” Mr Stevens said.

A peak of investment in the resources sector will drive broader investment around the economy, according to Mr Stevens, with dwelling investment set to benefit from the diverging spending.