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CBA raises home-loan rate, cites funding costs

Thu Jun 11, 2009 10:43pm EDT

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SYDNEY, June 12 (Reuters) - Commonwealth Bank of Australia (CBA.AX) (CBA), the nation's biggest home lender, is raising its standard, variable home-loan interest rate by 10 basis points, the bank said on Friday, citing increased funding costs.

The increase comes amid a growing view that the Reserve Bank of Australia (RBA) is done with its easing cycle. Markets RBAWATCH expect the RBA to keep rates unchanged at 3 percent in the coming six months, with futures CSRBA1Y=CSAU pricing in 75 basis points of rate hikes in the next 12 months.

The view has gathered ground after Australian jobs data released on Thursday was surprisingly resilient. Last week, gross domestic product numbers showed the country dodged a recession in the first quarter, one of the few countries to do so amongst the industrialised nations.

(Reporting by Arniban Nag and Mette Fraende)



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