Australia's central bank cuts rates to two-year low of 3.85%

SYDNEY, May 20 (Reuters) - Australia's central bank on Tuesday cut its main cash rate by 25 basis points to a two-year low of 3.85% citing a darker global outlook and cooling inflation at home, though it also remained cautious on further easing.

Wrapping up a two-day policy meeting, the Reserve Bank of Australia said upside risks to inflation had diminished while international developments were expected to weigh on the domestic economy.

Markets had been fully priced for an easing given a slowdown in inflation at home and a darker outlook globally following the announcement of hefty U.S. tariffs on imports. AU/INT 0#AUDIRPR