Bank of Queensland was the first to move, already passing on 35 basis points (bps), of the 50 bps cut made by the RBA.
This reduced rate cut may set a precedent for other major banks this month.
Mark Bouris, best known as the founder and chairman of Wizard Home Loans, says the big banks will not pass on the full 50 basis point cut to home borrowers.
“I don‘t expect anyone to pass on the 50 basis points,” Bouris told the Nine Network. “I actually think that’s why the Reserve Bank gave 50 basis points, because they know this is not going to happen.”
Although the forecast-beating cut was welcomed, business leaders have called for even bigger rate cuts, saying they are necessary to get the economy back on track, according to The Australian.
Stockland chairman Graham Bradley said one rate cut is not enough to turn around confidence, according to the Australian.
“People are scared about their jobs, so what we need to see is a trend emerge. If the RBA was confident the banks would have passed on all of a 25-basis-point move I think they would have done two cuts of 25 basis points, but they weren’t confident of that happening.”
Commonwealth Bank chief economist Michael Blythe said the 50 basis point cut would lift consumer confidence, according to Business Spectator.
“I think it has provided a circuit breaker for the negative feedback loop of consumer confidence that has been coming through,” Blythe said.
ANZ will announce its lending rates after its next scheduled pricing meeting on May 11.