Australian [B]Private Sector Credit[/B] grew at the slowest pace in nearly 16 years, adding 3.4% in the year to June. Continued contraction in lending seems to bolster the central bank’s recent assertion that the influence of changes in benchmark interest rates on bank lending rates has weakened over the past two years, suggesting monetary policy is losing potency in stimulating economic activity. A breakdown in this dynamic could prove to derail an extension of positive momentum that the Australian economy has built up in recent months of the back of generous fiscal stimulus, with growth levels retreating once again when the flow of government cash dries up.