Australian banking major ANZ has decided to hold its standard variable mortgage rate steady at 6.8 per cent, and says its small business loan rate will also remain unchanged.
The lender made its decision last Friday during its monthly interest rate meeting and according to Philip Chronican ANZ’s chief executive of domestic operations was made despite the fact the lender faces higher borrowing costs.
Mr. Chronican said the ANZ’s decision to hold rates steady was made in order to keep the lender competitive.
“We know that many Australians are feeling uncertain about the global economy and with household budgets under increased pressure this was another factor in our decision this month,” he said in a statement.
At the beginning of the month, the Australian central bank also decided to hold interest rates steady at 3.5 per cent following cuts in each of the previous two months
In May the RBA slashed rates by 50 basis points, followed by a 25 basis point cut in June. The central bank cited European instability and an unclear outlook for the Australian economy.
Mr. Chronican said whilst wholesale international funding markets used by lenders to secure financing had started to stabilize, markets still exhibit volatility.
The competition for deposits between Australian financial institutions remains intense, particularly in the term deposit sector.
Mr. Chronican said whilst savers were benefiting from higher interest rates as a result of intense competition, higher interest rates also meant there is pressure on ANZ’s interest rate margins.
This article first appeared on Australia’s leading finance portal money-au