South African credit growth accelerated at its fastest pace in more than two years in February as the central bank kept interest rates low and the recovery in Africa’s largest economy strengthened.
Borrowing (SACEIYY) by households and businesses rose 7.9 percent from 7.3 percent in January, the Pretoria-based Reserve Bank said on its website today. The median estimate in a Bloomberg survey of 15 economists was for credit to expand 7 percent.
The Reserve Bank held its benchmark lending rate at 5.5 percent yesterday, the lowest level in more than 30 years, to support the economy as inflation slows. Governor Gill Marcus said the bank will monitor whether price pressures spread as spending picks up.
“We are seeing a little bit stronger growth on the corporate side,” Dennis Dykes, an economist for Nedbank Group Ltd., said in a telephone interview. “If it continues at this rate, that is something the Reserve Bank will be watching.”
The rand rose 0.3 percent to 7.76965 against the dollar at 9:01 a.m. in Johannesburg. The yield on the benchmark rand debt due in 2015 fell 2 basis points, or 0.02 percentage point, to 6.78 percent.
Low interest rates helped to boost spending in the economy by an annualized 5.1 percent in the fourth quarter, the fastest pace in more than a year, the central bank said on March 19. The economy will probably expand 3 percent this year, up from an earlier estimate of 2.8 percent, the bank said yesterday.
Inflation (SACPIYOY) slowed to 6.1 percent in February, staying above the bank’s 3 percent to 6 percent target range.
The broad M3 (SAMYM3Y) measure of money supply rose 5.9 percent in February from a year earlier, compared with a revised 6.7 percent in January, the central bank said. The median estimate in a Bloomberg survey was 7 percent.
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