Latest data shows higher private sector credit
(2 May 2013 – Australia) The case has grown for further interest rate cuts from the Reserve Bank of Australia (RBA) as economic data continues to soften with weakened private sector credit growth.
Figures released by the RBA showed that private sector credit edged higher by 0.2 percent in March, continuing a similar rise the month before and bringing growth over the past year to 3.2 percent.
Business credit remained flat after falling 0.2 percent in February, and increased 2.6 percent over the past year. Housing credit performed the strongest, rising 0.4 percent last month after a 0.4 percent increase in February.
Financial markets are pricing in a 41 percent chance of a rate cut, the highest expectation since the RBA's decision in February to keep rates at 3 percent.
The markets are also pricing in at least 50 basis points of cuts by the end of the year.
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