If the Reserve Bank of Australia does as expected and reduced interest rates, National Australia Bank says it will pass the reductions along to its customers. NAB said Thursday that it would reduce its top line mortgage rates by 25 to 100 basis points, depending on what the RBA does next month.

The central bank has strongly hinted that it will enter a period of reductions when its monetary policy committee meets on September 2, based on increasing concerns of a slowing economy. Despite calls by the Kevin Rudd government to pass along reductions to customers, Australia's major banks had thus far resisted a commitment to do so, prior to Thursday's statement from NAB. ''While we continue to see volatility in international markets and increases in the average cost of long term funding, we have experienced some short term funding relief which we are keen to pass on to our customers,'' said Ahmed Fahour, chief executive of NAB Australia. 

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