CBA Refuses To Commit To Not Raising Interest Rates Independent Of Central Bank
Three of the big four Australian banks have ruled out the possibility of lifting their mortgage lending rates independently of the central bank.
However Australia’s largest mortgage lender CBA, has refused to commit to not raising its mortgage lending rate outside of the Reserve Bank of Australia’s official cycle.
On Tuesday the central bank opted to hold official interest rates steady at 4.5 per cent, despite near certainty amongst financial market participants that the RBA would tighten interest rates.
Many analysts had predicted that the major Australian banks would raise their mortgage lending rates by as much as 15 basis points higher that the predicted 25 basis point official rate hike.
Australian banks have cited higher funding costs on wholesale international markets as the reason for lifting their rates independent of the central bank.
Earlier in the week both the Federal Treasurer Wayne Swan, and the Reserve Bank warned Australian lenders that they had no justification for raising their lending rates outside the official interest rate cycle.
Three of the Big Four lenders went on record as saying that interest rate hikes independent of the RBA were unlikely, but so far CBA has refused to commit to staying in line with the central bank.
“The Commonwealth regularly reviews its interest rates but doesn’t speculate on interest rate movements,” a spokesman said.
Many analysts have suggested that CBA was the most likely to hike its rates in excess of the anticipated 25 basis point tightening by the central bank. CBA is the largest mortgage lender in the country with a 30 per cent market share.
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