ED STODDARD, Johannesburg | Wednesday 12.10pm
THE money supply and private credit extension grew a bit faster than expected in November but analysts said the numbers are not too worrying.
Economists said the figures are traditionally on the high side in November in the run up to the Christmas shopping season and still look good compared to this time last year.
”The numbers are above consensus but this should not be cause for concern…they are often high at this time of the year,” said Adenaan Hardien, an economist at Velocity.
The data shows broadly defined annual M3 money supply grew 8,52% in November compared to a revised 9,0% in October.
Annual private sector credit growth was 8,17% against a revised 8,0% in October.
A Reuters consensus poll of economists forecast M3 year-on-year growth of 8,0%, while private sector credit was seen expanding 8,1%.
”I think the Reserve Bank should be comfortable with these numbers especially when you look at the progress that has been made,” said Hardien.
M3 growth in November last year was over 14% while private credit extension growth was close to 18%.
Another economist said while the data is no cause for alarm it is important on the inflationary and interest rates fronts to get the figures down.
”We are not seeing the improvements that we would like to see at this point,” the economist said.
Hardien said said other factors, including a stable currency, will keep inflation subdued in the new year and allow the Reserve Bank to pursue its gradual relaxation of monetary policy.
Market reaction was muted as liquidity has all but dried up over the holiday period.
”These numbers are not going to have much of an impact today,” said one bond trader.
Bonds were steady with yields on the key R150 bond bid at 13,18%. The rand was stable at R6,14 to the dollar.I n equities, the all share index was up 0,21% to 8466 in very thin trade.– Reuters