Rand softens as credit extension slows

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NewRandMoney Reuters.

Johannesburg - South Africa's rand was softer against the dollar on Friday, shedding a couple of cents after central bank data showed a slowdown in private sector credit extension, suggesting there might not be scope for more interest rate hikes this year.

The rand could later extend losses if April trade numbers due out at 14:00 SA time show a sharper-than-expected deficit, as this would point to continued pressure on the current account.

By 08:35 SA time the rand was trading at 10.4445 per dollar, down 0.28 percent from Tuesday's close.

The Reserve Bank reported that growth in credit demand from South Africa's private sector slowed to 8.27 percent year-on-year in April from a revised 8.73 percent in March.

This adds to recent data illustrating the economy remains under stress, and could tie the Reserve Bank's hands on raising interest rates despite an upturn in inflation pressure.

Government bonds edged lower in early trade, with yields for the heavily traded 2026 and 2015 issues each adding a basis point to 8.19 percent and 6.57 percent respectively. - Reuters

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