Not so hungry for credit
July 29, 2009
Johannesburg - Growth in demand for credit by South Africa's private sector slowed to a more than five-year low of 3.98 percent year-on-year in June, below forecasts, from 5.70 percent in May, central bank data showed on Wednesday.
During the same period, growth in the broadly defined M3 measure of money supply braked to 6.04 percent, compared with a revised 7.86 percent previously.
A Reuters poll forecast that private sector credit growth would come in at 4.55 percent in June, while the annual growth in M3 was seen at 6.8 percent.
Absa Capital macro strategist Ian Marsberg said the data was "a bit weaker than consensus had expected" but that it still largely reflected weak underlying economic conditions and showed that credit conditions remain quite tight.
"Overall we had been expecting a weaker number to come out today but it doesn't change our view that the Reserve Bank will leave interest rates unchanged in August," he said.
A combination of tighter lending rules enacted in June 2007, and relatively high levels of debt have seen banks become more cautious in their lending. - Reuters
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