Business banking customers to miss out on rate cuts
The Reserve Bank of Australia (RBA) is expected to sanction further cuts to interest rates next month, but business banking customers should not start celebrating just yet.
Entrepreneurs have been pleading for a rate reduction since the turn of the year, as companies are being crippled by sizeable repayments on their business loans.
The RBA made two successive readjustments in November and December 2011, but has not made any changes in 2012.
Lower than expected inflation figures will prompt the central bank to make amends very soon, but AMP Capital Investors chief economist Shane Oliver believes Australia's major banks will not pass all of the savings on to their corporate customers.
He told the Mercury that if the RBA reduces the cash rate by 25 points, business owners are only likely to see lending rates fall by between ten and 15 points.
Therefore, Mr Oliver stated that a 50-point drop would be more suitable. This is especially true in light of reports that the nation's major banks are actually considering hiking rates on their business products and home loans in the near future.
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