NAB denies correlation with RBA moves

by Adam Smith31 Jan 2012

NAB boss Cameron Clyne has again flagged the possibility the bank won't follow any move by the RBA next week.

In an interview on radio station 3AW, Clyne parroted the position put forward by other bank chiefs that funding costs are becoming increasingly disconnected from the official cash rate.

"There's no correlation to what the Reserve Bank does and the cost of our funds," Clyne told 3AW.

Clyne's comments echo those from ANZ Australia chief Philip Chronican, who warned that the bank's moves reflected a "full spectrum of funding sources" rather than just the RBA cash rate.

Clyne did defend the Reserve's role in the economy, however, saying that the RBA took bank mortgage rates into account when setting monetary policy.

"Interest rates will end up where the Reserve Bank would like them to be," Clyne told 3AW.

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