Johannesburg - Credit extension to the private sector (PSCE) grew at a rate of 5.58% year-on-year (y/y) in December from 4.63% in November, the South African Reserve Bank (SARB) said on Friday.
The rate of growth of South Africa's broad M3 money supply measure rose by 6.92% y/y in the year to end December from 7.23% in the year to end November.
The rate of growth in PSCE was expected to have registered 5.5% y/y, according to a survey by I-Net Bridge and M3 was expected to have increased at 7.9% y/y.
South Africa's total domestic credit extension grew at a rate of 4.27% y/y in December from 3.79% in November.
Total loans and advances, which is PSCE excluding investments and bills discounted, recorded 4.34% y/y growth in December from 4.40% y/y in November.
The SARB also indicated that its international liquidity position rose to $43.353bn in December from $43.080bn in November.
Overall credit was at 22.3% in June 2006 when interest rates were hiked that year. Money supply dipped below the crucial 20% mark in July 2008 for the first time since November 2005.
Rates were cut three times in 2010 to a 30-year low of 5.5% in an attempt to boost the moribund economy, currently growing at just 2.6% and credit numbers are an important indicator the central bank watches to determine demand signals.