Some banks refused to pass on the full cut in official interest rates
The Reserve Bank of Australia has reduced the cash rate to a record low 1.25 per cent
Political leaders have told bank bosses they should pass on the full cut in official interest rates to customers or risk Australians doubting they've changed their ways since the banking royal commission.
The Reserve Bank of Australia (RBA) has reduced the cash rate to a record low 1.25 per cent.
The official cash rate, which reflects what the central bank charges commercial banks on overnight loans and influences other interest rates, had sat at a record low of 1.5 per cent since August 2016.
Now that the RBA has lowered the rate to the new low of 1.25 per cent, borrowers with an average home loan of 400-thousand dollars would save about 58 dollars on their monthly repayments if the cut was fully passed on.
Despite there being no legal obligation for banks to lower interest rates on loans or credit cards in line with the cash rate, treasurer Josh Frydenberg has urged the four big banks to pass on the benefits of a lower rate in full.