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At its meeting yesterday, the Reserve Bank Board decided to lower the cash rate by 25 basis points to 2.5 per cent, effective 7 August 2013.
Banks are expected to pass on in full any cut in the official interest rate on Tuesday to mortgage customers, amid improvements in key funding markets and the scrutiny of an election campaign.
With investors betting the Reserve Bank will reduce the cash rate to a record low of 2.5 per cent, official figures highlight an easing in the ”war for deposits”, a trend blamed by banks for their failure to pass on cuts last year.
”Last time they passed it all on. I would be surprised if they did not pass it on, particularly pre-election.”
When the RBA cut the cash rate to 2.75 per cent in May, Commonwealth Bank, Westpac and NAB all passed on the full 0.25 percentage point reduction. ANZ cut its rates by 25 basis points, a move it said was driven by falling funding costs.