Westpac goes 28bps

From BS:

Westpac Banking Corporation will exceed the Reserve Bank of Australia’s 25 basis points cash rate cut, dropping home loan rates by 28 basis points.

The move lowers its headline standard variable mortgage rate cut to 5.98 per cent, effective August 19.

National Australia Bank Ltd, Commonwealth Bank, ING Direct, Bank of Queensland and Yellow Brick Road have passed on the central bank’s quarter of a percentage point rate cut in full to its borrowers.

So, is this the beginning of a new trend in “out of cycle” cuts? No. Westpac has had the highest interest rates of the big four for some time and analysts have been debating whether or how they would bring them into line with the other banks. And now we know!

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.