RBA cuts another 25 points off official interest rate

Posted on 5/06/2012  

The Reserve Bank today delivered another interest rate cut. The RBA board  announced a reduction of 25 basis point in the official rate, which is now down to 3.5%.

At its previous meeting, on 1 May, the RBA cut the official rate 50 basis points from 4.25% to 3.75%.

The decision will boost property markets that are on the cusp of a recovery. It will also be the catalyst for prospective buyers who have been fence-sitting.

But the key factor, once again, is the degree to which this cut will be passed on to borrowers by major lenders.

Folllowing the 0.5% RBA cut on 1 May, most major lenders passed on about 0.35%. Since September 2008, major lenders have withheld 0.7% in interest rate reductions, according to research by RateCity.

ENDS

 

 

 

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