YOU can get a home mortgage from a bank for as little as 5.5 per cent, which, apart from a brief period during the heart of the global financial crisis, is cheaper than at any time since the 1960s.
Small business overdrafts are still not far short of 10 per cent and no lower than their long-term average, but as far as the Reserve Bank is concerned, the structure of interest rates across the economy is well into stimulatory territory.
The bank considered that rates were at a neutral level in December 2011, and it has cut its cash rate by 1.25 percentage points since then. Although there has been some expansion in the spread between the cash rate and lending rates, the Reserve Bank would believe it has strongly stimulated the system, which is yet to show its full effect.
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