THE ANZ Bank has moved to sever the long-standing link between Reserve Bank decisions and movements in mortgage rates, saying its interest rates will now be reviewed each month, independently of the central bank.

ANZ, NAB, Westpac and the Commonwealth Bank buckled under political pressure yesterday and passed on Tuesday's full 0.25 percentage point interest rate cut.

ANZ has long been planning to "break the nexus" between Reserve changes and mortgage pricing ... CEO Philip Chronican. Credit:Justin McManus

But the ANZ also revealed a plan to distance itself from the perennial debate over whether banks should pass on changes in the official rate.

From now on, the bank will review its interest rates on the second Friday of each month, regardless of whether the Reserve has moved rates at its monthly meeting, which will normally fall 10 days earlier.