NZ slide in consumer credit applications slows: Veda Advantage

Friday 23rd January 2009

The slide in New Zealand applications for consumer credit slowed last month, suggesting aggressive interest rate cuts by the central bank and lower taxes are helping calm people's concerns about their finances.

"While talk of a recovery may be premature, the steep decline of the credit market could be slowing up," said John Roberts, New Zealand director of Veda Advantage, the nation's biggest credit information service.

Applications fell 6% in December from the same month of 2007. That's less than a third of the slump in applications for credit such as personal loans and hire purchase agreements in November, the firm said in a statement.

The first round of income tax cuts kicked in on Oct. 1, with the next round due in April. The central bank is set to cut the official cash rate by 100 basis points to 4% on Jan. 29, according to the consensus of estimates in a Reuters survey, extending the steepest easing cycle since the OCR was introduced in 1999.

By Jonathan Underhill

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