More lenders cut short-term rates

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Thursday, March 3rd 2011, 3:23PM 1 Comment

There are now 16 lenders overall that have made cuts to short-term rates with PSIS, AMP, Kiwibank, BNZ and Credit Union Baywide joining the other 10 outlined in yesterday's story.

BNZ has made the smallest cuts to short-term rates so far, slicing 10 basis points off one-year and 18-month rates which now sit at 6.35% and 6.45%. The two year and three year rates have been cut by 15 and 16 basis points respectively, while four and five year rates have had five basis points shaven off.

Kiwibank's limited time special in the six-month rate has been cut by 36 basis points to 5.59%, the one-year rate has a 50 basis point drop to 5.95%, two and three years by 19 basis points to 6.40% and 6.90%. Four and five-year rates have also seen reductions of 15 and 10 basis points respectively.

AMP has dropped six-month and one-year rates by 50 basis points, 18-months by 40 and two and three year rates by 10 and 11 basis points.

PSIS dropped its six-month rate by 35 basis points and its one-year rate by 45 basis points with both now sitting at 5.95%. It's two and three-year rates were sliced by 15 basis points and the four-year rate by five basis points.

Credit Union Baywide cut six month and one year rates by 50 basis points and two and three-year rates by 20 basis points.

The changes by lenders have been made in response to the sudden drop in swap rates following last week's earthquake as the markets expectations around the Official Cash Rate (OCR) changed to predict a cut by the Reserve Bank.

The Reserve Bank will review the OCR in its Monetary Policy Statement next Thursday  and if the predictions of bank economists are correct, a 50 basis point cut from 3.00% to 2.50% could be on the cards.

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