Big four hold off on cutting rate
MT MORGAN'S Eddie Lehr thinks it would be great if the big four banks followed the Reserve Bank's recent interest rate cut, but he won't be holding his breath.
The Reserve Bank of Australia (RBA) on Tuesday reduced its cash rate by 25 basis points to 4.5%, the second consecutive cut following a similar move in November.
Eddie joined in the chorus of angry and frustrated Australian battlers yesterday who are still waiting on the big four, Commonwealth, Westpac, ANZ and NAB to follow suit with the Reserve Bank announcements.
"Well, it's basically the case of, if you could put it under your pillow you would," Eddie said yesterday.
A decision not to pass on the cut could deny a household with a $300,000 mortgage a monthly saving of up to $49.
Rockhampton Economist for CQUniversity, Professor John Rolfe, said yesterday it was unlikely the banks would lower rates if they hadn't already.
"It indicates that they don't want to, but it's a matter of government and community pressure that may persuade them to," Prof Rolfe said.
"Although they and the Australian economy had difficulty due to the European situation, I don't feel that much sympathy for them as they were able to maintain their high profit, so they haven't shared the pain."
Treasurer Wayne Swan has warned the nation's major banks they face the wrath of their customers if they don't pass on the latest official interest rate cut in full.
Mr Swan said he expected the cut to be passed through in full.
"I think families and small businesses will be really angry with the banks if they try to hold back," he said.