Reserve Bank rate cut: Tamworth businesses welcome rate cut that's been hailed as a life-saver after drought, fires and the pandemic

After the financial onslaught brought on by relentless drought, bushfires and the outbreak of the pandemic - the cut to 0.1 per cent from the 0.25 per cent that was announced earlier this year has given hope to the business community that the worst could be over.

There's never been a better time to look at business growth and investment, Tamworth Obieco Industries HR manager Fiona Sweeney said.

"I think as a business there are many ways you can make the most of these opportunities, because it is the lowest interest rate ever," she said.

"As someone within business, we spend so much time dealing with the day-to-day running that we don't have many opportunities to sit back and look at the business.

"If there was ever a better time to do that, now is the time."

A slew of other measures have been announced by the Reserve Bank to help boost the economy.

The 0.1 per cent cash rate is not expected to increase for the next three years, and Reserve Bank governor Philip Lowe said it would have a positive impact on the unemployment rate.

"With Australia facing a period of high unemployment, the Reserve Bank is committed to doing what it can to support the creation of jobs," he said.

"The unemployment rate is expected to remain high, but to peak at a little below 8 per cent, rather than the 10 per cent expected previously.

"At the end of 2022, the unemployment rate is forecast to be around 6 per cent."

It confirmed it would purchase $100 billion in Australian Government bonds to lift inflation and encourage investment.

A reduction on the interest rate on exchange settlement balances to zero was announced, along with a reduction in the target for the yield on the three-year Australian Government bond to about 0.1 per cent.

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Tamworth Business Chamber president Jye Seboer said it will be interesting to see how much of the cut is passed on by the banks.

"I think it's encouraging and we will see a strong sign of investment into the region and the opportunity not to put off investment or capital infrastructure planning," he said.

"I think we will see people restructure or equipment finance at such low interest rates rather than use capital savings.

"It's silly to use your own money if you can borrow money cheaper than what you can gain interest on."

Mr Segboer said he hoped it would encourage new businesses to open in town.

"Low rates will hopefully give people the confidence to take that next leap and have new businesses come out as well," he said.

"We saw some people that had borrowed at the initial lockdown and because NSW's didn't last as long, some had kept those lines of credit open for their own security."

The Reserve Bank announced the record low rate cut on Tuesday afternoon.