Reserve Bank of Australia massive interest rate hike

The Reserve Bank of Australia announced that it would rise interest rates for the second month from 0.35 per cent to 0.85 per cent.

its means intrest rate would be hike on 50 points.

RBA’s Governor Pholip Lowe said that this inetrest rates rising is a further step for strong the Australian Economy that was effected during the COVID-19.

RBA’s Governor Pholip Lowe words was:-

Reserve Bank of Australia’s Governor Pholip Lowe said in a statement that Increase in interest rates by the board is a further step in the withdrawal of the extraordinary monetary support that was put in place to help the Australian economy during the pandemic.

“The resilience of the economy and the higher inflation mean that this extraordinary support is no longer needed.

“Given the current inflation pressures in the economy, and the still very low level of interest rates, the board decided to rise it by 50 points.

“The board expects to take further steps in the process of normalising monetary conditions over the months ahead in Australia.”

After the RBA’s announcement big banks started to apply that hike for theire customers.

now Aussie Four Big banks has announced that they would follow that hike for there customers.

Westpac was the first banks to announce it would pass on the rate rise to borrowers.

After that other three big bank CBA, NAB and ANZ also announce for rate rise.

Some Banks annouced that they would applying that hike on saving accounts also.

Macquarie Bank, ING and CBA have raised interest rates on savings accounts and transaction.

From 06-17-2022 Macquarie bank will increase from 0.2 per cent to 1.5 pre cent inetrest rate on balance up to $250,000

and ING will increase to 2.10 per cent interest rate on balance up to $100,000 from 06-15-2022.

Macquarie’s Customer can withdraw money without penalties and no requirement to transfer money back.

it will picking up competition in the savings market.

this competition will put pressure on other Big Banks like NAB, ANZ, Westpac to apply rate hike on savings customers. 

the Westpac Chief Executive Chris de Bruin said that

“Westpac Customer are ahead on mortgage repayments.Westpac Customer were Financialy managed during COVID-19.

Westpac Chief Executive Chris de Bruin’s word was:-

de Bruin said that This means the majority of our customers are ahead on mortgage repayments and have a buffer available to help them manage an interest rate increase.

For our customers who need some extra help or who are in financial difficulty,

we have our specialist teams standing by who will work with them (customer) to tailor a financial solution to meet customers needs.

CBA group executive, retail banking Angus Sullivan said :-

We encourage customers to contact us to discuss the options available to them including ensuring offset accounts are set up and linked to their eligible home or investment loan,

Lowe flagged further rate rises were on the cards as the RBA moves to quash the high inflation rate.

Inflation is expected to increase further,

but then decline back towards the 2 to 3 per cent range next year,

Higher prices for electricity, gas and recent increases in petrol prices mean that,

in the near term, inflation is likely to be higher than was expected a month ago.

As the global supply side problems are resolved.

and commodity prices stabilise, even if at a high level, inflation is expected to moderate.

The Commonwealth Bank has claimed The Aussie’s economy will see a drastic slowdown in the next twelve months.

Reserve Bank of Australia might have to cut interest rate by the end of next year after this cash rate rises.

Now The interest rate is 0.85 per cent,

this is the first time when RBA rise rate back to back 2 time in 12 years with this hike.

And also finance experts assumption was about 25 to 40 points in rate rise before this announcement.

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