South African credit growth eased in February to the slowest pace since April as inflation concerns hurt consumer sentiment, the central bank said.
Growth in borrowing by households and companies slowed to 7.9 percent from 8.6 percent in the previous month, the Pretoria-based Reserve Bank said on its website today. The median estimate of 13 economists surveyed by Bloomberg was 8 percent.
“Growth in household credit is likely to be relatively subdued this year as consumer confidence remains weak due to the poor economic outlook, high existing debt as well as strict lending standards,” economists at Nedbank Group Ltd. (NED) said in a note after the data was released. “The Reserve Bank is likely to try and keep interest rates as low as possible for as long as possible.”
The South African Reserve Bank kept its benchmark interest rate at 5 percent last week as inflation remained near the top of the bank’s 3 percent to 6 percent target range. Overall spending in the continent’s largest economy shrank in the last three months of the year, the first contraction since 2009. Inflation quickened to 5.9 percent in February.
The broad M3 measure of money supply rose 7.7 percent in February from a year earlier compared with 6.8 percent in January, the central bank said. The median estimate in a Bloomberg survey was 7.2 percent.
The rand was little changed at 9.2619 per dollar at 9:39 a.m. in Johannesburg. The yield on the rand bond due in March 2021 dropped 6 basis points to 6.53 percent.
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