Banks profit from waiting to pass on the rate cut, says former RBA senior economist | The Business

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Challenger chief economist and former head of economic analysis at the Reserve Bank, Dr Jonathan Kearns says in a falling rate environment, it is worth it for the banks to delay passing on RBA rate cuts in order to boost profits. Even a delay of a few weeks can be worth quite a bit to the banks, he said. In terms of whether Australia could see any more rate cuts, Dr Kearns says the latest wage price index data - which revealed the slowest wage growth in more than two years - will complicate the RBA's decision about when to next cut rates.
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