ANZ has announced it will no longer tie its interest rate decisions to the official cash rate released by the Reserve Bank of Australia (RBA).


The bank has announced it will instead evaluate its interest rate policy on the second Friday of every month.


ANZ CEO Phillip Chornican said that the public’s reaction to the bank’s hesitation to drop rates showed the relationship with the RBA had become “dysfunctional”, and that there were more nuanced influences that effected the bank’s interest rates.


“Bank funding costs are now largely unrelated to movements in the Reserve Bank’s Official Cash Rate.  We have therefore taken a decision to announce future pricing changes for retail and small business variable interest rates on the second Friday of each month,” Mr Chronican said.

“This provides a measure of predictability for customers on when rate changes will occur and it provides us with the flexibility to reflect movements in funding costs across the full spectrum of funding sources – not solely in response to the Reserve Bank’s cash rate."