ANZ has published its first independent interest rate review, announcing that variable interest rates for retail mortgages and small business lending will remain unchanged.

 

ANZ’s rate hold comes after it announced in 2011 that it would be announcing any rate changes on the second Friday of each month, independently of the Reserve Bank of Australia.

 

The bank’s decision to untether its rates mechanisms from the official cash rate after a split with the RBA in 2011, when the large four banks delayed in passing on a December rate cut from the RBA.

 

ANZ CEO Australia Philip Chronican said: “By reviewing key variable lending rates each month we can more accurately reflect the sustained changes in funding costs we incur through the interest we pay to customers for their deposits and to investors in wholesale money markets.

 

“It helps us to contribute to an informed debate about how we fund our customers’ loans and the effects of the continuing global financial crisis on Australia, particularly the significant economic instability which currently exists in Europe.”

 

The decision to untether itself from the local cash rate was informed by the bank’s exposure to global financial uncertainty, with all four banks playing an active role in a tumultuous foreign money market.