RBA 'may hold back on rate rise'

There may not be another change to the headline rates interest for another two months, it has been suggested.

The Reserve Bank of Australia (RBA) could be set to leave interest rates unchanged until next February.

Such is the assertion of Commonwealth Bank chief executive Ralph Norris, who notes that December's 25 basis point increase may be the last move until the second month of 2010 after several lenders opted to pass on rises above this amount to their portfolio of Australian banking products.

Indeed, Westpac raised rates on its home loan portfolio by 45 basis points, while Mr Norris' bank increased its standard variable rate on home loans by 37 basis points.

Speaking to Sky Business, he claims: "I think given the fact there have been interest rate increases over and above the [official cash rate] then I think it is a possibility that we might not see an increase in February."

Following RBA's base rate increase this month, executive manager of deposits for Suncorp Tony Meredith claimed that increasing competition in the term deposit market meant there was no time like the present to save money, something that could provide people with the impetus to compare accounts in order to make the most of their money.

By Emma North