Big banks could cut mortgage rates
THE prospect of the big banks cutting mortgage rates out- of- cycle in the coming months has been heightened after the Reserve Bank said global funding pressures were easing, making it cheaper for banks to raise funds. The RBA yesterday said there was scope to cut the official cash rate further if needed but is confident the economy is already responding to its recent cycle of cuts. And in a surprise move, RBA deputy governor Philip Lowe said the high Australian dollar has also been a positive for the whole economy as it has stopped overheating and kept interest rates low.Overall, the central bank is upbeat the Australian economy is in a good spot despite the more cautious approach of the household sector, which has also seen national savings levels jump $90 billion more a year than in the mid-2000s, hurting retailers. The RBA’s minutes for the March meeting said the housing sector was picking up, retail conditions had improved and unemployment was subdued.