Growth in demand for private-sector credit eased to 15,3% year-on-year in November from a revised 16,36% in October, the South African Reserve Bank (SARB) said on Wednesday.
For the same period, growth in money supply grew to 16,26%, compared with 15,59% the previous month.
Responding to the figures, Nedbank chief economist Dennis Dykes said: ”The private-sector credit figure is slightly above expectations, but there has been a well-established trend — in the last six months the figure has come down strongly, which is what you’d anticipate.”
He said that the asset-based credit figure was extremely relevant as this month it had come down to 13,7% year-on-year.
”At this time last year it was 22%.”
While the Reserve Bank’s rate increases had shown results, Dykes said it usually took 12 to 18 months before their effects set in.
”Therefore, the relaxing of the interest rate will only be felt in late 2009 or early 2010,” Dykes said.
Dykes said although the growth in money supply grew to 16,26% — above expectations — this figure was not as reliable as private-sector credit extension figures.
”Money supply generally receives a lot less focus and the figure tends to be volatile as it’s influenced by all sorts of factors — so too much shouldn’t be read into it.”
He added that money supply had, however, moved in the right direction.
”The November figure may not be great, but if you go back to the same time last year, it stood at 23% year-on-year,” Dykes said. — Sapa