RBA raises interest rates

SB076 · 07-10-2009, 11:03 AM

The RBA raised interest rates by 0.25% the first reserve bank in the developed world to do so. Previously banks said they were unable to reduce their interest rates when the RBA cut rates as they cited that the majority of their funds are bought in from offshore (independently of the RBA) Therefore in the past when the RBA cut rates the banks were not able to pass the reduction on to its customers.

Now that the RBA has put its rates up, it will be interesting to see what the banks do in coming days (the four major banks have all said that rates are up for review) In theory given what they have told us in the past they have no need to raise their rates. However I suspect this will not be the case.

EFPWR · 07-10-2009, 11:17 AM

They will raise them for sure. Banks are incredibly greedy.

Bucknaked · 07-10-2009, 11:22 AM

Of course they will. It's like dangling a carrot in front of a donkey. RBA raises the carrot, the donkey's eat it.

TZENU · 07-10-2009, 11:26 AM

Quote:

Originally Posted by Bucknaked

Of course they will. It's like dangling a carrot in front of a donkey. RBA raises the carrot, the donkey's eat it.

The best explanation ever!

Scott · 07-10-2009, 11:27 AM

The banks have [for the most part] already put up their Fixed Rates and to some degree are already trading at a premium on their Variable Rates.

I agree that they will likely screw us over - look out for another one in November.

FTE72 · 07-10-2009, 11:34 AM

There are some certainties in Life,some of which are;
Death, Taxes and Banks will screw you.

EFPWR · 07-10-2009, 11:35 AM

Quote:

Originally Posted by FTE72

There are some certainties in Life,some of which are;
Death, Taxes and Banks will screw you.

Amen to that brother.

Yellow_Festiva · 07-10-2009, 11:41 AM

Wonder how long it will take em?

My lender always took 3-4 weeks to "review" rate cuts. Lets see if it takes them a month to "review" an increase?

There are still a lot of lenders in the discount mortgage market, not as many as prior to the GFC, but enough to encourage competition IMO.

BA GT-HO · 07-10-2009, 11:56 AM

Quote:

Originally Posted by Yellow_Festiva

Wonder how long it will take em?

My lender always took 3-4 weeks to "review" rate cuts. Lets see if it takes them a month to "review" an increase?

4 minutes.

T3ts50 · 07-10-2009, 02:11 PM

Quote:

Originally Posted by Yellow_Festiva

Wonder how long it will take em?

My lender always took 3-4 weeks to "review" rate cuts. Lets see if it takes them a month to "review" an increase?

There are still a lot of lenders in the discount mortgage market, not as many as prior to the GFC, but enough to encourage competition IMO.

A lot of smaller banks wait for the big banks to announce their increases before they do.

I am in banking and we havent been told when or by how much our rates will increase by though on our loans. Though we have announced our rate increases on our deposits.