Private sector credit (PSC) continued to fall in November, according to the latest statistics from the Central Bank, with residential mortgages having dropped by €134 million during the month.
Exchange rate movements, write-downs of loans, and increased provision for bad debt accounted for approximately half of the €2.1 billion drop in the level of PSC during the month.
A fall of €2.3 billion that occurred during October was largely due to such valuation effects. Total PSC at the end of November was €373.7 billion.
Apart from the valuation changes, the drop in PSC, including mortgages, arises from more debt being paid off than is being taken out.
The annual rate of change in headline PSC fell further in November, to minus 5.2 per cent.
When valuation effects are taken into account, the underlying stock of PSC was approximately 1.7 per cent lower in November 2009 compared with a year earlier.