The Commonwealth Bank has said it will not cut standard variable mortgage rates in response to the Reserve Bank’s latest official interest rate cut, with managing director Matt Comyn saying these are “times of record.”
Minutes after the Reserve Bank cut the cash rate to an all-time high of 0.25%, the CBA said via Twitter that it would not cut standard variable rates on mortgages, but would cut small business loan rates by 1 percentage point.
The bank also announced that it would cut various fixed rate loans by up to 0.7 percentage points and increase one of its term deposit rates.
“These are unprecedented times, and they call for unprecedented action,” Mr. Comyn said in a tweet from the bank.
The CBA move came after the RBA cut rates in an emergency meeting on Thursday and took extraordinary steps to support lending to businesses in the face of an expected recession caused by the coronavirus.
Under a new policy unveiled by the RBA, banks will be able to access $ 90 billion in financing over three years at an interest rate of 0.25%, provided they increase their lending to businesses.
The RBA said the federal government has developed a “top-up” support program for non-bank lenders, small banks and the securitization market.
The central bank has also taken steps to ease some of the signs of strain in overnight money markets – which are used by banks to settle transactions with each other and are critical to setting interest rates.
The other banks have yet to announce their response to the RBA.