/ 31 October 1999

MONEY SUPPLY UP

THE Reserve Bank said higher corporate deposits and corporate demand for credit have driven September’s money supply and credit growth figures higher than expected. M3 money supply has increased at an annual rate of 7,77% compared to August’s 5,27%. The central bank said the figure is within its guideline range of 6 to 10%. Private-sector credit extension, or borrowings by households and companies, rose at a preliminary annual rate of 11,51%, up from August’s revised annual rate of 10,01%. The bank said individuals’ deposit growth is subdued. “The build-up in M3 during September was mainly recorded in deposits of insurers, pension funds, other companies and public enterprises,” the Reserve Bank said. It said the highest rate of growth relating to credit is in the category of loans and advances, mostly as a result of corporate overdrafts. “Possible explanations for corporate demand for credit include the financing of inventory rebuilding ahead of the Christmas season,” the bank said. September’s data