Credit growth hopes hang on a falling dollar

Despite record-low interest rates, business lending growth has slowed as the non-mining sector fails to pick up momentum. But the falling Australian dollar could spark a turnaround.

Commercial lending declined in October, but we should be more interested in the trend that points to solid (yet slowing) growth in lending activity. On a trend basis, Australian Bureau of Statistics data today showed commercial lending rose by 0.6 per cent in October to be 17.6 per cent higher over the year. But we are seeing a clear decline in the pace of growth over the past six months, with monthly trend growth slowing from 3.2 per cent in May to 0.6 per cent in October.

Graph for Credit growth hopes hang on a falling dollar


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