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ISCOVER
Staff Reporter
The major banks are unlikely to pass on the latest interest rate cut by the Reserve Bank of Australia (RBA) in full, according to a survey by Loan Market Group.
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The RBA followed up its Melbourne Cup decision to cut the cash rate with another cash rate cut, reducing the rate to 4.25 per cent.
But Loan Market chief operating officer Dean Rushton said a poll of the company’s brokers found 61 per cent believed the banks would not pass on the full 0.25 per cent reduction announced by the RBA.
“Almost two thirds of our brokers surveyed think the banks will resist passing on the full amount,” he said.
“We found 37 per cent believed lenders would hold back five basis points while 24 per cent predicted they would retain as much as 10 basis points.
“However, 39 per cent of our brokers are more optimistic and expect the banks will pass on the 25 basis points reduction in full.”
Mr Rushton said none of the 162 brokers who responded to the survey believed any lender would pass on more than the 0.25 per cent reduction announced by the RBA.
He said there has been a lot of commentary from banks in recent weeks on the cost of funding and doubts over the way forward for the debt crisis in Europe.
