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Send  Print  Share  RSS  Twitter  28 Feb 2011

ECONOMY: Credit Extension Dips

 

Johannesburg, Feb 28 (I-Net Bridge) - Credit extension to the private sector (PSCE) grew at a rate of 5.01% year-on-year (y/y) in January from a revised 5.56% (5.58%) in December, the South African Reserve Bank (SARB) said on Monday.

The rate of growth of South Africa's broad M3 money supply measure rose by 8.19% y/y in the year to end January from 6.92% in the year to end December.

The rate of growth in PSCE was expected to have registered 6.2% y/y, according to a survey by I-Net Bridge and M3 was expected to have increased at 8.3% y/y.

South Africa's total domestic credit extension grew at a rate of 3.41% y/y in January from 4.27% y/y in December.

Total loans and advances, which is PSCE excluding investments and bills discounted, recorded 4.73% y/y growth in January from 4.34% y/y in December.

The SARB also indicated that its international liquidity position rose to US$44.451 billion in January from US$43.353 billion in December.

Overall credit was at 22.3% in June 2006 when interest rates were hiked that year. Money supply dipped below the crucial 20% mark in July 2008 for the first time since November 2005.

Rates were cut three times in 2010 to a 30-year low of 5.5% in an attempt to boost the moribund economy, currently growing at just 2.6% and credit numbers are an important indicator the central bank watches to determine demand signals.

End

I-Net Bridge, Tel: +27-11-280-0832, newsdesk@inet.co.za

Copyright 2011 I-Net Bridge. All rights reserved.


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