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ISCOVER
Staff Reporter
While the RBA decided to leave rates untouched yesterday, there is growing speculation that not all the majors are prepared to follow suit.
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According to a report in the Daily Telegraph, both Westpac and ANZ said they have no plans to change their interest rates in the immediate future. However, both NAB and CBA refused to be quizzed on speculation that they might lift rates independent of the RBA.
The Housing Industry Association’s senior economist Andrew Harvey said the housing industry would not be able to sustain any independent rate hikes.
Earlier this month, housing approvals fell for the fifth consecutive month, suggesting any recovery in residential construction was short lived.
“In such an environment it is imperative that there is no independent move by Australia’s trading banks to hike rates,” Mr Harvey said.
“According to the RBA’s Financial Stability Review, the major banks have already increased the net interest margins in their Australian operations by around 35 basis points since the trough in 2008. This suggests that any independent increases by the banks will be about extending already large profits rather than being about necessity.”
On Monday night Treasurer Wayne Swan warned banks not to lift rates higher than any RBA move saying that, “I don’t believe there is any case that the banks can make to move over and above any decision that may or may not be taken by the Reserve Bank.”
