There are a number of key factors that determine how interest rates are set. One factor follows the announcement from the Reserve Bank of Australia (RBA) that the cash rate will be increasing. This decision is an independent one made by the RBA, aimed at balancing current economic conditions, in particular rising inflation.
Variable interest rates may also change outside an announcement or any movement from the RBA. Market conditions and funding costs are taken in to consideration when looking at rates for both loan and deposit customers.