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- Commonwealth Bank was the first to bring forward its forecast to June.
- Australia and New Zealand Banking Group and National Australia Bank Limited are also expecting to increase their interest rates in mid of this year.
- Westpac shares were trading in red amid reports that it may brought forward its rate rise to June, from August
The Reserve Bank of Australia has kept official cash rate near zero, but borrowers are taking steps aimed at preparing for increased mortgage interest rates. It is still unclear when the interest rates will be raised by the apex bank.
Westpac Banking Corporation (ASX:WBC) one of the banks which is now expecting to hike its interest rate in June instead of August earlier.
A few months ago, the Reserve Bank was dropping hints that rates would not likely rise before 2024.
But, the latest meeting of the RBA (5 April 2022) provided fresh clues, prompting several experts to revise their projections for the first-rate hike, with a growing consensus building around June, though some still see August as the more likely start date.
The RBA has repeatedly stated in public pronouncements before its meeting on Tuesday that it was "prepared to be patient" before raising its official interest rates.
This week, that term was noticeably lacking.
"One of the largest banks of Australia, Westpac Banking Corporation (ASX:WBC) had expected the first rate hike in the cycle to arrive in August before the decision to abandon 'patience,'" said long-time Westpac chief economist Bill Evans.
Other top banks like Australia and New Zealand Banking Group Limited (ASX:ANZ) and National Australia Bank Limited (ASX:NAB) have also brought forward their expectation to June while Commonwealth Bank of Australia (ASX:CBA) was the first bank to bring forward its forecast to June following the RBA's mid-year projection for reduced mean inflation.
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While most economists now think that a rate hike will happen by August at the latest, there are still many disputes over it.
Many experts predict that the initial increase will be only 0.15 percentage points, bringing the official cash rate from 0.1 to 0.25%.
The Westpac's share price jumped 6% last month. This has pushed its year-to-date gain to a whopping 12%, which compares favourably to the ASX 200 index's 1.2% drop in 2022.
At the time of writing this article, the bank’s shares were trading at AU$24 each, down almost 1% on ASX.
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