Aflatoon, the RBA lends very little money. That is why they are powerless to influence interest rates.
Lowering their rate and then telling the Australian public that the banks are being greedy because they don't do the same, when they are not in the position to lend lots of money at that rate to the big four in pure hypocrisy. The RBA is always trying to work out what the big banks will do next, and then pre-empting them, to give some indication that they are in control of interest rates. They are not.
Our problem is that we have so much debt that we are beholden to foreign lenders, as we don't have enough deposits to lend to ourselves.
Rob, it may be a low act to reduce rates to depositors but leave rates the same for lenders, but that, I fear, is the result of the Government's policy. APRA are requiring our banks to meet Basel III capital adequacy requirements two years earlier than they need to - requiring either a capital raising or increased profitability.
Perhaps the haste to comply with Basel III is because APRA realise that our banks could be in big trouble if Europe collapses. The RBNZ, which is also the regulatory authority for NZ as well as the Reserve Bank, have issued instructions to local banks (most of which are Aussie owned) to have a mechanism in place to give depositors an overnight haircut of whatever % is required to maintain their solvency should there be a big exogenous event.
