Australian Prime Minister Anthony Albanese called on the country’s big banks to boost deposit rates for savers amid concerns rate hikes are only being passed on in full for borrowers.
(Bloomberg) —
Australian Prime Minister Anthony Albanese called on the country’s big banks to boost deposit rates for savers amid concerns rate hikes are only being passed on in full for borrowers.
“It is completely unacceptable,” Albanese said in a TV interview on Flashpoint WA broadcast Sunday. “The banks need to get their act together.”
Albanese said the government had communicated its concerns “very loudly and I’m doing that again now.”
The country’s competition watchdog this month launched an inquiry into the issue, saying increases on interests rates for deposits had been “smaller and less consistent” than those applied to mortgages.
In an attempt to quell inflation running at a three-decade high of 7.8%, the Reserve Bank of Australia has raised rates by 3.25 percentage points since May and said more hikes are likely needed.
This means that people in Australia — one of the world’s most heavily indebted nations — are being squeezed on two fronts. For Albanese, the challenge is trying to manage the political fallout and reassure a nervous electorate.
Central bank Governor Philip Lowe’s seven-year term expires in September and there is speculation he won’t be offered an extension. In particular, he has faced criticism for his pandemic-era guidance that interest rates were unlikely to rise until 2024. Treasurer Jim Chalmers has deferred discussion of the Reserve Bank chief’s future until after he receives a review of the central bank on March 31.
Read: Chalmers Pledges Responsible Australian Budget to Beat Inflation
While Albanese didn’t directly address questions about his reappointment, he said Lowe has “the confidence of the government.”
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