Johannesburg - Growth in credit demand by the private sector
accelerated to 9.07% year-on-year in September compared with 7.93% rise in
August, central bank data showed on Monday.
Growth in the broadly defined M3 measure of money supply
however slowed to 7.54% year-on-year in September after rising by 7.78% the
Economists surveyed by Reuters forecast year-on-year private
sector credit growth of 8.3% in September while M3 was seen expanding by 7.8%.
Said Absa Capital economist Ilke van Zyl: “We did have a low
base last year September but it doesn’t
solely justify the increase to 9.07% year-on-year we saw this morning.
Given the weak economic circumstances we must then assume that the rate cut in
July must have had some or other effect on borrowing on the margin.”
“It’s definitely something the South African Reserve Bank
will look at and consider (during next month’s policy meeting) but I think the
headline inflation print we had last week will carry much more weight.
“Couple this with the widening current account deficit, and
I think the Sarb will be more wary of the imbalances that a low interest rate
can create in an economy. So all in all I think this very much supports our
view that interest rates will remain on hold until late 2014.”
The rand was little changed at R8.6650 against the dollar at
06:29 GMT from R8.67 before the data was released at 06:00 GMT. The yield on
the 2015 bond was steady at 5.49% as was that for the 14-year bond at 7.785%.
Credit demand growth has been in positive territory since
May 2010, although its recovery has been somewhat constrained by high
unemployment and an uncertain outlook for companies.
The ratio of household debt to disposable income remains
extremely high at more than 76% while unemployment remains around 25%.
The Reserve Bank’s benchmark repo rate is at a four decade
low of 5.0% after the central bank cut it by 50 basis points in July.