Banks have slashed their interest rates on time deposits and savings, and there will be many downward adjustments in the future as special stimulus policies drive down the cost of financing. In recent weeks, large banks have lowered the interest rates on a series of time deposits, and experts call them unexpected consequences of supporting bank financing policies.
In recent days, the Commonwealth Bank has lowered the interest rate for an important time deposit, while Xitai has lowered the incentive rate for savings deposits. The comparison website Canstar reported that there were 167 time deposit interest rate changes last week, of which 164 were lowered. The company’s expert Steve Mickenbecker said the trend reflected the super cheap inter-bank lending rate. He said a key indicator, the six-month inter-bank note swap rate fell to only 0.17%, lower than the official cash rate of 0.25.
“This means that banks can borrow money from wholesale markets at very low prices,” he said. He said the interest rate cut was also driven by the bank’s cancellation of the temporary special interest rate introduced in March. Andrew Murray, president of fixed income intermediary company Curve Securities, said the reduction in retail fixed deposit rates is a by-product of RBA’s stimulus policies, and he expects this trend to continue. At the emergency meeting in March, RBA lowered the cash interest rate to an all-time low, provided banks with a credit line of only 0.25% of the 90 billion interest rate, and launched a repurchase of treasury bonds to reduce the yield of treasury bonds. These measures increased the bank’s capital during the crisis, but also injected a large amount of cheap capital into the banking system.
