Banks set to keep half of RBA rate cuts

The big banks will only pass on about half of any cut to the official interest rate next week, according to leading economists.

Aussie Home Loans founder John Symond believes that if the central bank cuts the cash rate by 25 basis points to 4 per cent, banks will pass on just 15 basis points as they move to prop up their profit margins.

“Politicians will come out with lots of rhetoric, but it is pretty obvious to the money markets and the RBA that the banks have no other option but to withhold some of any rate cut,” Mr Symond said.

Source: Herald Sun