While it looks all but certain that the Reserve Bank will keep the official cash rate on hold when the Board meets tomorrow, borrowers are still hoping for a 25 basis point reduction.
According to a recent Loan Market Group survey, almost 70 per cent of borrowers expected a rate cut in March – a figure that hasn’t changed in the three weeks since.
“Although some progress has been made in the European debt crisis, and many economic indicators are within target, there remain stalled sectors that would benefit from an April rate cut by the RBA,” Loan Market spokesman Paul Smith said.
“The RBA has noted that the banks no longer face the cost of funding pressures that caused them to lift their home loan rates independently of the central bank.
“So if we get a cut in the cash rate on Tuesday consumers will be hoping their lenders follow suit and pass on the reduction in full.”
THE ADVISER
