Rates rise again
(7 April 2010 – Australia) The Reserve Bank of Australia made the decision to raise the official cash rate a further 25 basis points to 4.25 percent yesterday, saying that their goal is to keep inflation close to target.
The Commonwealth Bank was the first of the majors to pass on the rate increase, raising their interest rate to 7.11 percent; if the interest rate increase is passed on by the big four it will move the most of the banks' standard variable mortgage rates above seven percent.
Glenn Stevens, governor, Reserve Bank of Australia, said that while lenders had generally raised rates a little more than the cash rate, interest rates to most borrowers had been somewhat lower than average.
The board has judged that with growth likely to be around trend and inflation close to target over the coming year, it is appropriate for interest rates to be closer to average, Mr Stevens said in a statement.
Today's decision is a further step in that process, Mr Stevens added.
If passed on by all of the major banks the 25-basis point rise in interest rates will add about A$48 a month to a A$300,000 mortgage on a 25-year term.
While National Australia Bank announced earlier this week its intention to move its standard variable interest rate no more than the RBA’s movements, Westpac’s chairman Ted Evans said that the bank would no longer use the central bank’s movements as its guide.
Glenn Stevens, governor, Reserve Bank of Australia, said that while lenders had generally raised rates a little more than the cash rate, interest rates to most borrowers had been somewhat lower than average.
The board has judged that with growth likely to be around trend and inflation close to target over the coming year, it is appropriate for interest rates to be closer to average, Mr Stevens said in a statement.
Today's decision is a further step in that process, Mr Stevens added.
If passed on by all of the major banks the 25-basis point rise in interest rates will add about A$48 a month to a A$300,000 mortgage on a 25-year term.
While National Australia Bank announced earlier this week its intention to move its standard variable interest rate no more than the RBA’s movements, Westpac’s chairman Ted Evans said that the bank would no longer use the central bank’s movements as its guide.
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