Banks hold back rate cut

The Reserve bank of Australia yesterday cut official interest rates by 0.25 per cent to a 49 year low of three per cent.

National Australia Bank said yesterday that it would not be passing on any of the rate cut to borrowers. Commonwealth Bank announced that it would pass on 0.10 per cent of the 0.25 per cent cut to borrowers.

Westpac and ANZ have yet to make announcements about whether the rate cut will be passed on, however Westpac CEO Gail Kelly has pointed to the bank's higher funding costs.