Australian Credit Growth Slows Amid RBA Rate Hikes

Australia's private sector credit growth has slowed down to 8.4% year-on-year in July, according to data released by the Reserve Bank of Australia (RBA). This marks a marginal decline from June's 8.5% and indicates a gradual cooling in borrowing activity as the central bank's elevated interest rate environment takes effect.

The monthly figures show a modest slowdown in credit demand, with both business and housing credit growth showing mixed trends. Housing credit has been sensitive to mortgage rate changes, with many borrowers opting for fixed-rate loans or reducing new borrowing. Business credit, on the other hand, has been supported by investment in equipment and working capital, but growth is also moderating.

The RBA's tightening cycle continues to weigh on households and businesses, making it harder to secure mortgages or personal loans. Policymakers will continue to monitor these trends as they balance the need to curb inflation with supporting sustainable growth.