Holistic interest rate strategy for Australian Bank
Published on April 24, 2023
How Australian banks can manage interest rates holistically across both sides of the balance sheet.
Banks in Australia had not been exposed to rising interest rates for over a decade. However, following a period of historically low rates, over the past months the Reserve Bank of Australia (RBA) raised the cash rate to 3.60 percent in a staggered approach. “It will be some time before inflation is back to target rates,” shared RBA governor Philip Lowe in his February statement on monetary policy.
Based on RBA’s cash rate hikes, banks updated their rates for loans and deposits inconsistently. On the loan side, the entire rate increase was passed on to all clients – usually on the same day of RBA’…
