Banks say don’t expect us to pass on RBA rate cuts

The Reserve Bank may cut the cash rate but that does not mean the Reserve Bank expects banks to follow said Steven Münchenberg, Chief Executive of the Australian Bankers’ Association (ABA).

“Banks make their individual pricing decisions based on a range of factors.”

In the recent Statement on Monetary Policy, the Reserve Bank noted, “Bank funding costs – relative to the cash rate – have risen by about 50 basis points over the past year…The rise in bank funding costs relative to the cash rate over the past year largely reflects the increased cost of deposits.”

Source: Australian Bankers Association