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By: Jessica Darnbrough
NAB has applied pressure to the other three majors, warning that it will not raise its interest rates above any movements made by the Reserve Bank in today's board meeting.
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Treasurer Wayne Swan said NABs decision to keep its standard variable rate in line with the Reserve Bank would be very appealing to customers of any other bank that tries to takes its clients “for a ride”.
“Official rate movements are decisions independent of the RBA, but I think most families understand rates are currently at 1970s levels and can’t stay there forever,” Mr Swan said.
The other three majors have refused to be drawn on whether or not they will raise interest rates above any movement made to the official cash rate.
Banking economists largely expect the Reserve Bank to lift the official cash rate when they meet later today, after a recent slew of positive data suggests the domestic economy is expanding.
NAB’s group chief economist Alan Oster said he expects the Reserve Bank to raise interest rates more aggressively during the remainder of the year, with a 25 basis point increase expected in both April and May.
According to Mr Oster, the Reserve Bank is widely expected to lift the official cash rate to 5.25 per cent by year’s end.
