At 3 per cent, the overnight rate is at the lowest level seen since the early 1960s. This has fed through into significant declines in the rates paid by borrowers, especially, but not only, households. The debt servicing costs of households have fallen faster and further than in previous cyclical episodes.
The Board has not felt the need to cut our policy rate to the very low levels – effectively zero – seen in some other countries. There are two reasons. The first is that the situation we face is not as dire.