Fin24

Rate cut boosts ATM cash withdrawals

2012-08-07 13:58

Johannesburg – ATM cash withdrawals in July 2012 saw a 4.1% year-on-year increase‚ to an average of R435.54 per transaction‚ according to the Spark Cash Index (SCI).

The SCI measures the average value of cash withdrawals across more than 1 700 Spark ATMs throughout the country.

“A year-on-year increase in cash withdrawal activity was recorded across all provinces‚ with the exception of Limpopo‚ suggesting positive year-on-year growth in consumer spending across the country‚” said Marc Sternberg‚ MD of Spark ATM Systems.

This is the seventh year-on-year increase this year. Sternberg said this suggested consumer spending had grown at a faster rate than in 2011.

He said the recent repo rate cut was particularly timely for retailers and should ensure cash withdrawal and consumer spending activity remained strong for the rest of 2012.

“This is the first interest rate cut since November 2010 and historically the SCI has recorded an uptick in cash withdrawal activity post a reduction in the prime interest rate. This shot in the arm to consumers’ disposable income will ensure they pay less interest on debt‚ effectively stimulating consumer spending activity for the remainder of 2012‚” Sternberg said.

David Wilson‚ senior analyst at IHS Global Insights‚ said the full impact of the interest rate cut on consumer spending would be felt towards the end of 2012.

“To date‚ consumers have remained cautious of spending‚ fuelled by recent factors such as electricity tariff increases in the winter months. However‚ the recent interest rate cut will most probably boost spending and thus cash withdrawals again in the coming months‚” Wilson said.

* Follow Fin24 on Facebook, Twitter and Google+.


Comments
  • palu.jon - 2012-08-07 16:15

    a rate cut boosts ATM Withdrawals!!! Now i have heard it all!!! I think this guy has lost his SPARK!!!

  • mthokozisi.nozibele - 2012-08-07 20:05

    What a ridiculous article..... I'm perplexed, how many Spark ATMs are out there to gather reputable data about the economy!!! Spark ATMS have a cash index ?? Laughable to say the least.

  • pieter.mulder - 2012-08-08 11:27

    What a ridiculous title for an article. Correlation does not imply causation. I very much doubt that the cause of a 4.1% annual increase in ATM withdrawals is down to a rate cut. Inflation maybe? Just because every man who went to the moon ate chicken, doesn't mean that eating chicken will cause you to go to the moon.

  • pages:
  • 1