CBA defends partial rates cut
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The bank expects to cut interest rates further when the global financial system stabilises. (ABC News: Giulio Saggin, file photo)
The Commonwealth Bank (CBA) has defended its decision not to fully pass on yesterday's 100 basis point cut in interest rates.
CBA chief executive Ralph Norris says he expects the bank to cut interest rates further when the global financial system stabilises.
"Once we get back to a normalised market situation, I think it's fair to say you can expect to see reductions by the Commonwealth Bank which will be ahead and above those of the Reserve Bank's," he said.
"And also you will see out-of-cycle decreases as we have seen out-of-cycle increases."
Prime Minister Kevin Rudd has defended the big banks' decision not to pass on the full rate cut to consumers.
But he has also urged them to pass on further cuts if conditions improve.
"It's been important through this decisive action from the Reserve Bank for there to be maximum assistance to households and that we've seen that through the decision by the commercial banks," he told Ali Moore on ABC Local Radio.
"As financial markets stabilise we expect the banks also to pass through the rest over time."
Commonwealth Bank shares are in a trading halt after the announcement it plans to buy Perth-based BankWest.
