Australia’s Reserve bank has reduced interest rates to a record low, cutting its cash rate from 1.75% to 1.5%. while the reserve bank board and government hopes the further cut will boost the labour market and economic growth, the banks are not entirely supporting this.
Banks in recent times have either not been passing on the interest rates reduction fully or delaying passing on reduction in mortgage rates , in the process making millions of dollars while they delay.
The big four banks caught most people off guard by actually lifting some key deposit rates and increasing their revenue.
Commonwealth Bank will cut its standard variable interest rates for mortgages by 0.13 percentage points. The biggest major bank reduction was Westpac’s 14-basis-point cut for some of its home loan customers
· Commonwealth Bank by 0.12 percentage points
· ANZ by 0.12 percentage points
· National Australia Bank 0.10 percentage point
· Westpac Bank by 0.14 percentage points
Treasurer Scott Morrison Yesterday told Sky News "we would like to see them pass all of these things on".
"What we’ve seen from at least the two that have made a decision is not the traditional response," Mr Morrison said.
"It’s not like they didn’t pass it all on and did nothing else. What they’ve done is they’ve cut their mortgage rates and they’ve increased their deposit rates."
Mr Turnbull said the cuts were not enough. Addressing media in Canberra, he said the banks should pass on the rate cut in full or explain the decision "fully and comprehensively" to their customers
RBA governor Glenn Stevens said in a statement recent data suggested growth was continuing at a moderate pace, despite a big decline in business investment.
Tuesday’s board meeting was Mr Stevens’ second last. He will be succeeded on September 18 by his deputy, Philip Lowe.