Interest Rate Update (November 2019)

The following graph shows movements in both the 6 month and 3 year Bank Bill yield rates, for the period January 2016 to date.

These rates are wholesale rates which are net of any margin charged by financial institutions. It is not uncommon for retail premiums for 3 year fixed rates, to be 0.30% pa or 30 basis points above the wholesale premium.

Currently the 6 month wholesale Bill rate is 0.93% pa and the 3 year wholesale Bill rate is 0.89% pa, a discount of 0.04% pa or 4 basis points for the longer term. This discount has reduced significantly since the last newsletter, indicating that the market believes that rates may still be reduced, but not fall as dramatically as was expected a few months ago.