A decade on from the financial crisis, 38 countries currently have interest rates at an all-time low. Ultra-low interest rates seem to be the tool of choice for Central Banks to help stimulate economies globally. But seriously, this a decade on from the financial crisis? Did the world really recover from the financial crisis? Probably not …
Australia’s Central Bank, the Reserve Bank of Australia (RBA) cut its benchmark cash rate by 25 basis points to an all-time low of 1%. This following a cut of 25 basis points in June. This is the first time since 2012 that the RBA has delivered back-to-back interest rate cuts.
The Governing Council of the European Central Bank (ECB) expects the key ECB interest rates to remain at their present levels at least through the end of 2019.
The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility are 0.00%, 0.25% and -0.40% respectively and these rates are expected to remain in place at least until the end of 2019.
The Federal Reserve increased the target for the bank’s benchmark rate by 0.25% (to a range of 2.25% to 2.5%) at the end of December, the ninth rate rise since 2015. Rising benchmark interest rates are having little impact on mortgage and saving rates or interest margin of banks.
Interest Margin of Banks in the United States stood at 3.33% at the end of Q3 2018, up just 0.03% from Q2 2018 (3.3%) and up just 0.18% from Q3 2017 (3.15%).