RBA

I should have stuck to my original assertion that the RBA would pause in February. I wasn't alone however in being surprised at the RBA's decision to leave rates on hold.

It seems the RBA has one eye on the global environment with debt remaining a problem in some quarters, China trying to slow growth and countries such as Greece in some difficulty.

Their other eye is on business credit. While housing is humming along the RBA is conscious of the difficulties and exaggerated costs businesses, especially small, are having in gaining credit.

The RBA’s latest financial aggregates, published last week, show that business credit aggregates have been declining, on a monthly basis, since February last year. The December figure is down seven per cent, year on year.

The Australian Bureau of Statistics’ most recent lending finance data show new commercial finance commitments (in trend terms) falling steadily throughout 2009 – from $29.6 billion in January to $27.2 billion in November