The Reserve Bank of Australia (RBA) has reduced the official exchange rate for the second month to an unprecedented 1%, but is unlikely to be fully adopted.
Treasurer Josh Frydenberg said the banks were waiting for the rate cut to be fully respected, but experts were convinced otherwise.
"The Big Four problem is that their online savings rate is 0.3%, there is not much way to go. If you still reduce 0.25%, you get 0.05% on these rates, "said Steve Mickenbecker, a finance expert at Canstar.
About 60% of bank financing came from deposits, roughly 50-50 between online savings accounts and term deposits. There would be no possibility of reducing savings accounts.
Banks should retain part of the rate cut to offset lower profits. They would probably be stretched if the rate reduction was fully passed on to the borrowers.
"Do not be surprised if reductions at this level are not fully implemented. Saving rates have been drastically reduced over the last few years, far more than mortgage rate cuts, "said Cameron Kusher, CoreLogic's senior analyst in the field of research.
Although it is "not very good" for banks not to apply the full rate cut, "the cost of loans exceeds the simple cost of liquidity".
"The cuts were fully passed on, but we've seen it many times, but it's not necessarily the case," Kusher said.
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