Credit demand in South Africa exceeds expectations

Sep 30, 2010

Demand for credit among South Africa's private sector grew by more than forecast last month, new figures from the country's central bank have revealed.

Data released by the South African Reserve Bank showed August brought a 2.99 per cent year-on-year increase in claims for credit. This was up from the revised 1.96 per cent year-on-year rise seen in July and greater than the median results of polls conducted by two major news agencies. Analysts questioned by Bloomberg expected the increase to be 2.7 per cent, while a Reuters survey yielded a figure of 2.75 per cent.

However, improvement in the M3 measure of money supply was more subdued than had been anticipated - at 4.38 per cent compared to the 4.55 per cent seen by economists interviewed by Reuters. Speaking to the news source, economist for Efficient Group Freddie Mitchell did not rule out the possibility of another interest rate cut in South Africa, stating: "We'll have to wait and see."