RBA governor Glenn Stevens this week reduced the cash rate to 2.25%, which is a record low since the Reserve Bank gained independence and started targeting inflation in the 1990s.
The New Zealand cash rate remained at 3.5% last week but Reserve Bank governor Graeme Wheeler said the next move could be up or down.
Craigs Investment Partners broker Chris Timms said the Australian cash rate had been steady for 17 months before Tuesday's decision, the longest-equal period of rate stability since an 18-month run in the mid-1990s.
Money market traders had bet on a cut, pricing in a 60% chance of rates falling this month, although only seven out of 29 economists surveyed by Bloomberg forecast the move.
The statement by Mr Stevens revealed a desire to lower the already falling currency was the main factor behind the move away from rate stability, Mr Timms said.
''On the [Australian] dollar, the central bank noted it had declined `noticeably' against a rising greenback but by less against a basket of currencies. It remains above most estimates of its fundamental value, particularly given the significant falls in key commodity prices.''
Mr Stevens said a lower exchange rate was likely to be needed to achieve balanced growth in the economy.
He got his wish, as the Australian dollar fell more than US1.5c (NZ2.02c) after his announcement.
HSBC Australia-New Zealand chief economist Paul Bloxham said the next rate cut to 2% would probably be in May.
While the rate cut would boost an already booming housing market, it was likely to encourage the Australian dollar to fall further.
A housing bubble in the Sydney market was a key risk to the medium-term outlook.
The statement the cut was motivated by the RBA's view domestic demand was ''overall quite weak'' was surprising, Mr Bloxham said.
A range of indicators had generally shown conditions had been improving in recent months, including building approvals, employment, credit growth and underlying inflation.
''What is less clear is whether the rate cut will lift business confidence,'' Mr Bloxham said.
Mr Stevens noted in December it was not the cost of money being high which was constraining the hiring and investment decisions of businesses, Mr Bloxham said.
Lower rates vindicated the market's pricing and helped to keep downward pressure on the Australian dollar, which should support local growth, he said.
