The Central Bank is primarily responsible for the operation of monetary policy including the regulation of credit and interest rates. Its monetary policy statement for 1990 dated 28 February does not impose any credit restrictions. It indicates that overall credit growth of around 10 per cent seems likely this year and that slow growth of resources is an important issue for banks.
However, the latest banking statistics published on 3 May show that during the first quarter of 1990 the balance between bank resources and the demand for credit improved significantly. During the year to 30 March 1990 private sector credit grew by marginally less than in 1989 while non-Government bank deposits grew by 10.6 per cent, over four times the 1989 growth rate of 2.5 per cent. During the same period shares and deposits with building societies grew by 7 per cent compared with 5.9 per cent in 1989. The March banking statistics also show that private sector credit is growing at almost twice the annual rate projected for nominal GNP this year and that during March the banks added further to their excess holdings of secondary liquid assets.
Therefore, the latest banking statistics published by the Central Bank suggest that liquidity improved significantly during the first three months of this year and that the banks and building societies have adequate scope to finance lending to the private sector.