Credit provided to the private sector grew by 0.4 per cent in March, with a trend too slow to forestall an interest rate cut.

It was the second consecutive 0.4 per cent rise in the indicator, which shows the value credit provided to the private sector by banks and other lenders.

The seasonally adjusted figures released by the Reserve Bank of Australia (RBA) on Monday showed annual growth in credit slowed by 0.1 to 3.4 per cent, exactly what it was a year earlier.

Credit for housing rose by 0.4 per cent, continuing a run of nine months with monthly growth of 0.4 or 0.5 per cent.

Annual growth stayed at 5.3 per cent, the slowest in the history of the credit data which extend back to 1976.

Other personal credit fell by 0.1 per cent in March to be 1.5 per cent lower than a year earlier, the weakest annual result since 2009 in the midst of the global financial crisis.

Business credit was up by 0.6 per cent in March, with annual growth picking up by 0.1 to 1.3 per cent – better than the annual declines recorded from July 2009 right through to July 2011, but still a snail’s pace.

In the minutes of its board’s monthly monetary policy meeting in April, released two weeks ago, the RBA noted the “modest” pace of credit growth.

The updated credit figures confirm that the growth rate, although positive, still fits the description.

The RBA will not necessarily want credit growth to accelerate, but slow growth means credit expansion is unlikely to ignite inflation.

Accordingly, the figures support the case for a rate cut on Tuesday when the RBA’s board holds its monthly monetary policy meeting.