I am not clear of why banks could not leave lending rates unchanged following a rate cut from the central bank so to increase their interest rate margin and instead tend to lower their lending rates.
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$\begingroup$ In simple terms, each bank is afraid they will lose market share to the competition if they don't react by cutting their rate. $\endgroup$– nbbo2Commented Dec 10, 2020 at 16:02
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Why do gas stations decrease prices when oil prices drop?
Why do Dell/Hp/etc decrease their PC prices as component prices drop?
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