(Updates with economist’s comment in fourth paragraph.)
Aug. 30 (Bloomberg) -- South African credit growth unexpectedly accelerated to 5.7 percent in July as the lowest interest rates in 30 years spurred companies to seek more loans.
Borrowing by households and businesses rose from a revised 5.3 percent in June, the Pretoria-based Reserve Bank said on its website today. The median estimate of 12 economists surveyed by Bloomberg was 4.85 percent.
The Reserve Bank has kept its benchmark interest rate unchanged at 5.5 percent this year to help boost the recovery in Africa’s biggest economy, even as price pressures increased. While credit demand is picking up, companies are still holding back on investment in plants and machinery, undermining the growth outlook, Governor Gill Marcus said on Aug. 23.
“We expect corporate demand for credit to remain relatively subdued as businesses stay hesitant to expand operations too aggressively given lingering uncertainties over the strength of the local and global recoveries,” Carmen Altenkirch, an economist at Nedbank Group Ltd., said in a note to clients today.
A report today may show the economy expanded an annualized 1.6 percent in the second quarter, down from 4.8 percent in the previous three months, according to the median estimate of 18 analysts polled by Bloomberg.
The rand was at 7.0556 against the dollar as of 10:37 a.m. in Johannesburg from 7.0338 before the data was released. The yield on the R157 government bond, due 2015, was little changed at 6.553 percent.
Marcus said last week the bank will act “appropriately” if there’s a sustained slowdown in the global economy, fueling speculation the bank’s Monetary Policy Committee may lower its key rate again.
The broad M3 measure of money supply increased 5.6 percent in July from the year earlier, down from a revised 6 percent in June, the central bank said. The median estimate in a Bloomberg survey was for M3 to expand 5 percent.
--Editors: Gordon Bell, Nasreen Seria
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