Domestic savings blamed for banks smaller reductions
(7 June 2012 – Australia) The switch from offshore to domestic funding and the competition among Australian banks for deposits is the main excuse they will withhold some of the latest Reserve Bank of Australia (RBA) cuts according to analysts.
The four main banks last month passed on 37 basis points of the RBA's 50 basis-point cut and a similar ratio may be repeated for yesterday's quarter-point reduction by the central bank.
So far, the response to the RBA move has been limited.
Bank of Queensland (BoQ) lowered the cost of its variable mortgage rate by 20 basis points to 6.91 percent, effective from June 16.
QT Mutual Bank of Queensland, though, said its Rate Tracker home loan would decrease by the full 25 basis points to 6.1 percent, effective immediately.
The major banks have said mortgage and savings rates 'remain under review' with ANZ Bank expected to make an announcement on Friday in line with its regular review of rates on the second Friday of each month.
The central bank has cut 125 basis points off its cash rate since November and more cuts are expected in coming months as the worries about the outlook for global growth intensify.
In recent months, the major banks have justified holding back some for the RBA rate cuts on the basis that their own funding costs have risen because of the growing jitters on international money markets.
So far, the response to the RBA move has been limited.
Bank of Queensland (BoQ) lowered the cost of its variable mortgage rate by 20 basis points to 6.91 percent, effective from June 16.
QT Mutual Bank of Queensland, though, said its Rate Tracker home loan would decrease by the full 25 basis points to 6.1 percent, effective immediately.
The major banks have said mortgage and savings rates 'remain under review' with ANZ Bank expected to make an announcement on Friday in line with its regular review of rates on the second Friday of each month.
The central bank has cut 125 basis points off its cash rate since November and more cuts are expected in coming months as the worries about the outlook for global growth intensify.
In recent months, the major banks have justified holding back some for the RBA rate cuts on the basis that their own funding costs have risen because of the growing jitters on international money markets.
Subscribe