Banks respond to surprise Reserve Bank board decision

Bucking economists’ predictions, the RBA has kept the official cash rate on hold. Here’s how the banks have reacted.

National Australia Bank (NAB) has been the first of the big four banks to respond following the RBA board’s surprise rates decision on Tuesday.

In what was another lineball decision, the RBA kept the official cash rate on hold at 4.1 per cent for their first meeting of the new financial year.

NAB has been the first of the big four banks to respond to the RBA’s decision to keep rates on hold. Picture: NCA NewsWire

NAB’s home ownership executive Megan Bond said the rate pause was a “welcome breather for many mortgage holders”, especially at the start of the school holidays.

“While the news is positive today, this is the time for people to take advantage of the pause and plan ahead to work out if there are simple changes you could make to future-proof your budget and get ahead,” Ms Bond said.

If you can manage it, one thing to consider is topping up your home loan offset account to help save on interest.

“We know Australians are also feeling the pressure from a rising cost of living, which is why we’re proactively reaching out to customers and talking to those who might be feeling the pinch.”

Commonwealth Bank (CBA), Westpac, and ANZ are yet to respond.

Only CBA had predicted Tuesday’s decision to keep the cash rate on hold, but all four are predicting another rise in August’s meeting.

Tuesday’s decision to hold is just the second from 14 meetings, with 12 rises.

Originally published as Banks respond to surprise Reserve Bank board decision