Rabo first to hike rates after OCR hold

Raboplus is the first bank to break the silence following the Reserve Bank's decision to leave the Official Cash Rate on hold at 2.5 per cent yesterday. Rabo has announced it will increase its one through to five year term deposit rates by between 20 and 30 basis points (bps).

Rabo raised its one year deposit rate by 20 bps to 3.05 per cent; its two year rate by 25 bps to 4.10 per cent; three year by 25 bps to 5.35 per cent; four year by 30 bps to 5.90 per cent; and five year by 30 bps to 6.40 per cent.

The Reserve Bank's decision to hold the OCR on Thursday and call on banks to cut their short term lending rates has been widely ignored by the banks and the markets in the first 24 hours after the announcement.

If anything, the chances of increases in mortgage rates has risen because wholesale interest rates rose on Thursday after the OCR decision and the Reserve Bank's forecasts of an economy. Bank bill rates rose around 10 basis points and swaps rates rose between 9 and 25 basis points on Thursday.

INTEREST.CO.NZ