There has been "a noticeable easing in financial conditions" since the start of the year the minutes of the most recent monetary policy meeting of the Reserve Bank of Australia board observe.
"Average lending rates on housing and business loans in Australia continued to edge down over July," it said, "mainly owing to the ongoing replacement of more expensive fixed-rate and discount variable-rate loans from previous years.""Overall, cumulative movements in interest rates amounted to a noticeable easing."The RBA said it "noted that Australian banks issued new bonds at around the same level as maturities, resulting in little net issuance in recent months. "Secondary market spreads of the major banks' senior unsecured bonds to Commonwealth Government Securities had remained at their lowest levels since 2007."It said this was "gradually reducing the banks' average cost of financing as more expensive bonds matured."The low cost of wholesale financing, combined with an easing in competition in the deposit market, had contributed to a decline in banks' deposit rates in recent months."