Australian Monetary Policy Is Definitely Working

The RBA has just released the Private Sector Credit data for march, which showed once again that monetary policy in Australia is gaining traction.

Housing credit, the singly most-responsive economic indicator to RBA interest rate policy, rose 0.5% in February after a 0.6% rise in January.

Even though this is a slight deceleration in the month-on-month rate of growth, the yearly growth rate is now at 5.8% — the highest rate of growth since September 2011 before the RBA started cutting rates from 4.75% to the current 2.5%.

Investor housing accelerated to 7.6% year-on-year while owner-occupied rose to 4.9%.

Other data out showed private, non-housing, credit fell 0.2% in the month, while business investment rose 2.4% to leave these aggregates up 0.7% and 2.4% respectively year-on-year.

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