When the Reserve Bank of Australia "raises interest rates" (as they have just done by 0.25%), how does that affect the interest rates actually offered by banks who can set them at whatever they like in order to attract business just like every other competitive market?
In short: how does the Reserve Bank's interest rate influence what home loan lenders actually offer to customers?
Also: why can't interest rates be determined by supply and demand rather than by the interests of the government?
In short: how does the Reserve Bank's interest rate influence what home loan lenders actually offer to customers?
Also: why can't interest rates be determined by supply and demand rather than by the interests of the government?