Australian banks only passed on three-quarters of interest rate rises to depositors, Reserve Bank says

Increase for deposits compares favourably with New Zealand and the US, assistant governor Christopher Kent says

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Australia’s banks have only passed on about three-quarters of the increase in interest rates since May 2022 to depositors, while debt repayments by borrowers still have further to rise, a senior Reserve Bank official says.

The RBA’s cash rate has risen by 400 basis points since the central bank began lifting rates. The increase for deposits – roughly 300 basis points – is in line with previous phases of interest rate rise, and compares favourably with New Zealand and the US where the proportion passed by banks has been 50% and 35%, assistant governor Christopher Kent said in a speech on Wednesday.