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National Australia Bank (NAB) is the first major to cut its interest rates, passing on 20 basis points of the central bank's 25 basis point cut.
NAB will reduce its standard variable home loan rate to 6.38% from December 10, from 6.58% before the cut, while rates on variable business loans will also be cut by 20 basis points.
The bank has promised to offer the lowest standard variable home loan rate of the big four banks until the end of 2012.
Commonwealth Bank and ANZ would now have to cut their rates by at least 23 basis points to offer a lower standard variable rate than NAB.
