Three weeks after the Reserve Bank of Australia cut interest rates to a record low, the majority of financial lenders have passed the rate cut on to their agribusiness customers, the National Farmers Federation’s agribusiness loan monitor shows.
The May monitor, released yesterday, shows that five of the seven term loans tracked – from ANZ, BankSA, BankWest, NAB and Suncorp – have each had their rates cut by the full 0.25 percent.
CommBank meanwhile has passed on 0.20 percent, with only Bendigo Bank making no change to their rates.
In overdrafts, five of the eight lenders – ANZ, BankSA, BankWest, NAB and Westpac – have each passed on the 0.25pc rate cut to their agribusiness customers, with CommBank passing on 0.20pc.
Only Bendigo Bank and Suncorp failed to pass on any rate cut to their overdraft customers.
NFF president Duncan Fraser welcomed the news that the majority of lenders had passed the rate cut on in full, and urged those lenders yet to move their rates to follow suit.
“The 25 basis points rate cut, combined with a fall in the Australian dollar to below parity, is good news for Australian farmers and the agribusiness sector at a time when parts of the country are facing severe rainfall deficiencies, and farmers are grappling with challenges that are impacting on both their productivity and profitability,” Mr Fraser said.
“This rate relief couldn’t come at a better time for farmers, particularly as they wait for further detail from the state and federal governments on the implementation of the two major debt and drought announcements from the past month: the Farm Finance and National Drought Program Reform.”
“There is still scant detail about how either program will roll out, and which farmers will be eligible, so in the interim, these rate cuts will hopefully ease the pressure on the sector,” Mr Fraser said.
“We urge the governments to release the full detail on these programs, and encourage the banks that are yet to pass on a rate cut to pass it on in full,” he said.
Overall, the May Agribusiness Loan Monitor shows that since July 2012, the RBA has cut interest rates by a total of 0.75 percent. None of the financial lenders have passed the rate cuts on in full, with ANZ and NAB providing the biggest rate cuts on to their agribusiness customers – a total of 0.65pc from both lenders for both their term loans and overdrafts.
- The NFF’s Loan Monitor is compiled each month by money market monitor Canstar, and published by the NFF as a tool for all Australian farmers. The objective of the monitor is to track the relative movement in interest rates. The products included in these tables give the best like for like comparison for this purpose and are not meant as a comprehensive listing of all products offered by the institution to primary producers. The Agribusiness Loan Monitor is released each month following the Reserve Bank of Australia rate announcements.