TUESDAY, 11.00AM
GROWTH in credit extension to the private sector fell only marginally in June, to 16,39% from 16,65% in May, delivering a blow to market expectations of an imminent cut in interest rates based on credit growth projections by economists of around 15,1%.
Latest figures released on Monday evening by the Reserve Bank show better-than-expected money supply growth figures of 12,79% over May’s revised 15,32%, but this failed to offset the damper cast by the disappointingly high private credit growth figures.
Continued strong credit growth had confounded economists, who say it runs counter to SA’s slowing economy. The bond market, meanwhile, which had been showing declining yields on market expectations of a drop in rates, showed its disappointment with the credit numbers, with the benchmark government R150 long bond jumoping back over 14%, hitting a high of 14,04% before settling at 14,01%.