The RBA has announced that banks will have access to a $90 billion fund at a fixed interest rate of 0.25%. This initiative will reduce the funding cost of lenders and will encourage banks to pass on interest rate reductions to their customers.
Supporting the flow and reducing the cost of credit – Reserve Bank of Australia
The RBA has provided access to at least $90 billion in funding at a fixed interest rate of 0.25%. This will reduce the funding costs for banks in turn reducing the interest rates passed onto borrowers. This initiative is designed to support the recent cut to the cash rate. The RBA is also providing additional low-cost funding to lenders who expand their business lending with particular incentives for providing new loans to SMEs.
In addition, the RBA announced a further easing in monetary policy by reducing the cash rate to 0.25 per cent. It is also extending and complementing the interest rate cut by taking active steps to target a 0.25 per cent yield on 3-year Australian Government Securities.
More info on this initiative will be provided when available.
Links to Government Resources
52 Australian banks have indicated they will pass on the full rate cut of 0.25% including the big 4 banks.