SYDNEY - The Australian National Retailers Association (ANRA), representing the country's leading retailers, on Tuesday urged Australia's banks to pass on the full rate cut by the central bank to boost consumers spending during Christmas time.

The Reserve Bank of Australia (RBA) on Tuesday announced its decision to cut cash rate from 4.5 percent to 4.25 percent, effective from December 7.

The ANRA said the central bank's rate cut would have no impact in Australia's retail sector unless the major banks passed on the rate cut in full to customers.

The RBA hopes the cut can hold up the local economy despite the challenges facing Europe's financial services sector.

"The Reserve Bank's decision has the potential to lower the stress for families as utility costs continue to climb, but it's now up to the banks to deliver and pass on the whole of the cash rate cut to customers," ANRA Chief Executive Margy Osmond said in a statement on Tuesday.

Bank of Queensland (BOQ) in Australia has become the first bank to deliver interest rate cut following the central bank decision, reducing its standard variable home loan rate by 25 basis points to 7.36 percent.

Osmond said lower interest rates from banks would boost Christmas trade as consumers can use extra cash provided by the rates cut to buy a few more gifts.

"(Consumers) feel more confident that getting a few extra gifts this year won't break the bank," Osmond added.