The Reserve Bank of Australia (RBA) cut interest rates earlier this month after it realised the outlook for economic growth was even worse than expected.
In the minutes of the April 7 board meeting, released on Tuesday, the RBA acknowledged the economic slowdown had probably met the conventional benchmark for recession – two consecutive quarters of declining gross domestic product (GDP).
“The latest set of indicators suggested that GDP was likely to have fallen again in the March quarter,” the RBA said in the minutes.
Bank of Queensland Ltd (BoQ) has cut its standard variable rate on mortgages by 10 basis points, in line with other banks.
BoQ said its new standard variable rate on home loans would drop to 5.89 per cent from April 24.
But the bank was silent on interest rates applying to business loans, credit cards and other loan products.
BoQ’s move follows the Reserve Bank of Australia’s 25 basis point cash rate cut last Tuesday.
By Jill Fraser for Lending Central
Not only does Aussie Home Loans’ executive chairman, John Symond believe that banks are justified in passing on less than half (or in NAB’s case zilch) of the Reserve Bank’s official rate cut, he challenges the RBA’s decision to reduce the cash rate to a five-decade low of 3%.
Symond spoke to Lending Central earlier today.
LC: What is your response to the banks passing on such a paltry percentage of the RBA rate cut? Can it be rationalised?
JS: The answer is yes..
St George Bank has cut its standard variable home loan interest rates by 10 basis points.
The bank, which is owned by Westpac, said its standard rate will fall to 5.79 per cent from April 17.
St George will also cut its business and commercial lending rates by 25 basis points.
The mortgage rate reduction equates to a saving of approximately $16 per month in repayments on an average size loan of $250,000 over a 30-year loan term.
Four large lenders have matched the Commonwealth Bank in passing on less than half Tuesday’s official cut to interest rates.
The move comes after the banking industry was criticised heavily by the federal government for not passing on in full the interest rate cut by the Reserve Bank of Australia (RBA).
ANZ Banking Group, Westpac, St George Bank and Suncorp Metway Ltd announced they would shave 10 basis points from their standard mortgage rates after the RBA cut the cash interest rate by 25 basis points – or a quarter of a percentage point- to a 49-year low of three per cent.
Rabobank Australia Limited has announced it will lower the variable base rate on its rural loans by 0.25% per annum, effective April 17, 2009.
Rabobank general manager Rural Australia Peter Knoblanche said the bank was pleased to again be able to pass on the full 0.25% rate reduction to its clients following yesterday’s Reserve Bank of Australia decision to reduce the official cash rate.
“This latest reduction means we have been able to reduce the standard variable interest rate for our clients by a total of 3.9% per annum since last September,” he said.
ANZ Banking Group Ltd has cut its standard variable home loan interest rate by 10 basis points, mirroring a move by Commonwealth Bank of Australia Ltd (CBA).
The reduction comes after the Reserve Bank of Australia cut the cash interest rate by 25 basis points to a 49-year low of three per cent on Tuesday.
On April 17, ANZ’s standard variable home loan rate will fall to 5.81 per cent.
The Commonwealth Bank of Australia (CBA) stands alone as the only major bank to cut interest rates after another easing in monetary policy – albeit by only a proportion of the full cut announced by the Reserve Bank of Australia.
CBA, citing what it termed “extremely expensive” funding, said that it did not rule out passing on only partial rate cuts in future.
CBA shaved 10 basis points from its standard variable mortgage rate following the RBA’s 25 basis point rate cut on Tuesday.
The days of huge interest rate cuts may be over with the Reserve Bank of Australia (RBA) making only a modest 25 basis point reduction after Tuesday’s monthly board meeting.
The rate announcement came as miners Rio Tinto and Iluka Resources, and construction and mining equipment manufacturer Caterpillar, axed a combined total of more than 1,100 jobs in one day.
The central bank lowered the cash rate to a 49-year low of 3.0 per cent from 3.25 per cent, but even that wasn’t a small enough move for the country’s biggest home lender to be able to pass it on in full.
Leading mortgage broker Loan Market Group said the Reserve Bank of Australia had taken the right step by deciding to again lower official interest rates.
Loan Market Group Executive Director John Kolenda said the move to cut the cash rate from 3.25 per cent to 3.0 per cent reflected the uncertain economic outlook and escalating unemployment levels.
“This is the good move by the RBA and we expect the cash rate will fall to around 2 per cent or even lower this year,” he said.
Commonwealth Bank of Australia Ltd (CBA) has cut its standard variable home loan rate by 10 basis points.
The move comes after the Reserve Bank of Australia shaved 25 basis point of the official cash interest rate to a 49 year low of three per cent.
CBA’s standard variable rate cut now stands at 5.64 per cent.
Well, it’s “Rate Day” yet again and we love hearing that rates have come down yet again! As most of us are now waiting to hear just who is going to pass on the rate cut and who won’t.
So in our usual way and with no introductions really necessary, we give you “The List”!
Another 25 basis point drop was announced today (don’t need to look further than our other posts for more information) so read on to see who’s passing it on this time!
The Reserve Bank of Australia (RBA) cut its benchmark interest rate by a quarter of a percentage point on Tuesday, a move midway between widely held expectations of either a bigger move or no move at all.
The move brought the overnight cash rate to 3.00 per cent, its lowest since March 1960.
Prior to the announcement at the conclusion of the monthly meeting of the RBA’s board, the futures market had ostensibly factored in a cut of that size, but the pricing really reflected a split in financial markets between those expecting no move and those anticipating a cut of half a percentage point.
Westpac Banking Corp Ltd chief executive Gail Kelly has dampened expectations that banks will pass on in full any interest rate cut by the central bank tomorrow, saying bank funding costs are still too high.
Mrs Kelly said the banks are paying more for deposits, and that the cost of wholesale funding sourced offshore is “higher than it’s ever been”.
“The costs of funding have continued to go up,” she told the Seven Network’s Sunrise program on Monday.