Make no mistake, this is an emergency cut to a level well below what already was considered crisis level.

In bowing to the pressure of financial market traders today, Glenn Stevens abandoned his pledge that any changes to interest rates would be flagged well in advance.

Last July, the RBA governor attempted to soothe nervy traders - who then were punting on rate hikes - that any shift would be telegraphed.

"Long before any thought were to be given to an increase in rates, it would probably be sensible for the board to cease references to a future 'period of stability' and revert to the more normal formulation that the stable policy settings 'remained appropriate' or something like that," he said.

Okay, he was talking about rises. And given the Christmas/New Year holiday - where the Reserve Bank board skips a meeting - there really has not been time to flag an intended move.

But today's cut raises a couple of worrying questions.

The first are the events of last week, when business columnist Terry McCrann confidently predicted the RBA would cut, using language that indicated he had been told something.

While some bank economists, such as Westpac's Bill Evans, were calling for a cut this month, McCrann's column set financial markets on their ear.

The second concern is the Reserve Bank appears to have moved outside its normal territory.

Its primary role is to maintain steady prices, to keep inflation under control. In addition to that, it has a responsibility to maintain as close as possible to full employment.

It now seems to have added a third role to its mandate - to massage the level of the currency.

In the accompanying statement, Mr Stevens admitted underlying inflation was in its accepted comfort range of between 2 and 3 per cent, although at the lower end.

But despite a recent easing in the unemployment rate and solid indications from job advertisements, he fears unemployment may worsen in 2015.

What really has spooked Mr Stevens are the actions of his global central bank contemporaries, many of whom have either embarked on programs specifically designed to depress their currencies or to cut interest rates.

Despite the Australian dollar falling sharply in the past year, from around US94 cents last September to US77 cents early this week, Mr Stevens argued the currency was still overvalued, given the crash in commodity prices and the decline in our terms of trade.

There is no guarantee today's rate cut on its own will take the wind out of the currency's sails because, even at 2.25 per cent, Australia still offers an attractive return when compared with zero or even sub-zero rates on offer elsewhere in the developed world.

So the speculative flood of spare cash will continue to flow our way.

Late last year, Mr Stevens said his preferred level for the currency was US75c. What would it be now?