Damned if you do , Damned if you don’t, pardon my English but that seems to be the situation with rate cuts , RBA and banks.
RBA today kept the cash rate on hold with no changes to stay at 4.25 per cent
The politics of rate cuts ,Banks and Media bashing
The situation is getting out of hand come every time when the RBA has to make a announcement for rates to increase or decrease. ITs become a big media circus come every rate announcement by the RBA , Banks get thrashed even before a rate announcement is made and held guilty , analysts and economists have a hey day predicting what they think will happen , and the media adds to the frenzy by amplifying all the news with wicked twists to their benefit having a go at banks, Lenders and raising a ruckus giving banks much negative publicity .
Luckily punters took a sigh of relief this time, as they was no rate increase.. but nor did people get a discount as well. The RBA did not heed any economists prediction or media hearsay and chose to do what they though was right and let the rates stay the same
RATE Stays Put while banks stay neutral
The rates staying the same has put the banks in a bit of a predicament, while they raised the gauntlet last time (ANZ) saying they will wait a bit before they decide how they react to the rate announcement . RBA by not changing the rates have not given them an excuse anyway. Its is going to be a tricky situation for the banks , because the first bank to pass on a decrease always sticks in the mind of the consumer as a good bank.
The waiting game if pursued by the banks could be the difference between good PR and Bad PR for the Bank. . So we will wait for the next rate announcement . Until then good luck for the next rates announcement by the RBA.
Predictions by media
February 07 –
Reserve Bank board meets this morning in Sydney to consider whether to cut the official cash rate a further 0.25 points to 4 per cent- theage.com.au
The Reserve Bank of Australia is tipped to cut the official cash rate to 4 per cent at 2pm today.- http://www.theaustralian.com.au
Punters believe Reserve Bank will cut, but banks won’t pass on in full – www.news.com.au/my