Interest Rate Update (April 2015)

The following graph shows movements in both the 3 month and 3 year Bank Bill yield rates, for the period January 2006 to April 2015.

These rates are wholesale rates which are net of any margin charged by financial institutions.

Since early 2013, rates have continued to decline steadily.

Currently the 3 month wholesale Bill rate is 2.31% pa and the 3 year wholesale Bill rate is 2.04% pa, a discount of 0.27% pa or 27 basis points for the longer term.

This would appear to be a strong incentive to lock in rates on some borrowings. However, it also suggests that the market expects rates to remain low or drop even further.