Interest Rate Update (September 2016)

The following graph shows movements in both the 3 month and 3 year Bank Bill yield rates, for the period January 2006 to September 2016.

These rates are wholesale rates which are net of any margin charged by financial institutions. Rates have been on a gradual decline since early 2011.

Currently the 3 month wholesale Bill rate is 1.78% pa and the 3 year wholesale Bill rate is 1.61% pa, a discount of 0.17% pa or 17 basis points for the longer term. The discounted longer term rate suggests that interest rates are likely to remain low for the foreseeable future, providing incentives for borrowing rather than lending money.