Australian Big Four Banks Cut Interest Rates Amid Central Bank's First Cut Since 2020
The Reserve Bank of Australia (RBA) has reduced its cash rate by 25 basis points to 4.10%, triggering a wave of interest rate cuts by Australia's "Big Four" lenders.
Banks' Response
* Commonwealth Bank of Australia: Announced rate cuts on eligible business lending products, effective February 28.
* National Australia Bank: Reduced standard variable home loan interest rate by 25 basis points, effective February 28.
* Westpac Banking Corporation: Lowered interest rates for home loans and deposits for both new and existing customers, effective March 4.
* ANZ Group: Cut variable interest rates across domestic home loans by 25 basis points, effective February 28.
Market Impact
The financials sub-index in the Australian stock market dipped almost 1% as the "Big Four" banks' stock prices declined.
Justification and Outlook
The RBA's rate cut marks its first monetary policy easing since November 2020. The central bank cited progress in reducing inflation but remained cautious about further easing. The banks' rate cuts aim to stimulate economic activity and support borrowers.