Supporting The Flow of Credit

Incentivising banks to provide credit to small and medium businesses

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.

FAQs

At the end of February the RBA cut interest rates to a historic low of 0.25%. The governing body has confirmed it will not make any further cuts to interest rates.

52 Australian banks have indicated they will pass on the full rate cut of 0.25% including the big 4 banks.

Supporting The Flow and Reducing the Cost of Credit - Frequently Asked Questions(FAQ)

Will the RBA cut interest rates during the Coronavirus pandemic?

At the end of February the RBA cut interest rates to a historic low of 0.25%. The governing body has confirmed it will not make any further cuts to interest rates.

Will banks pass on interest rate cuts?

52 Australian banks have indicated they will pass on the full rate cut of 0.25% including the big 4 banks.

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