Yesterday, the Reserve Bank of Australia lowered the cash rate by 25 basis points to 2.5 per cent effective from today. 

Within minutes Westpac, the Commonwealth Bank and the NAB passed on the rates, with Westpac doing one better to lower its rate by 0.28 per cent. 

ANZ is expected to make an announcement on Friday. 

Farmers are the ones hoping to see the rate cut passed on in full after banks were slow to act in the last financial year.

Most banks only passed on cuts of between 0.40 per cent and 0.65 per cent, despite the cash rate being cut by 0.75 per cent last year, prompting president of the National Farmers’ Association Duncan Fraser to call for the full cut to be applied. 

The cut is expected to provide some relief for borrowers, but manager of the Wagga Business Chamber Larry Buete isn’t expecting businesses or consumers to start letting go of their cash right away. 

“It’s six weeks out from the election and with all the promises being made left and right, I think people will want to wait and see who gets in before they loosen their purse strings,” he said. 

“It will be at least a month until people start seeing real benefit from it and at that stage we’ll be right on top of the election.”

He said while rates are at a record low, spending habits have changed with more Aussies opting to save.

Consumers have previously lifted their spending several months after rate cuts, but have been less likely to do so over the past few years. 

While the retail sector may not see a boost, other areas such as housing are, thanks to lower interest rates for home buyers. 

“It was definitely welcome news,” Samantha Brunskill, sales and marketing co-ordinator of Brunslea Park Estate, said. 

“This will help coming up to the end of the year to stimulate the end-of-year rush in the building industry.”