The local currency retreated ahead of trade data despite weakness in the trade-weighted greenback according to NKC Research. Picture: Karen Sandison/African News Agency(ANA)
The local currency retreated ahead of trade data despite weakness in the trade-weighted greenback according to NKC Research. Picture: Karen Sandison/African News Agency(ANA)

Rand trades on the back foot

By Dhivana Rajgopaul Time of article published Dec 1, 2020

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JOHANNESBURG - The local currency retreated ahead of trade data despite weakness in the trade-weighted greenback according to NKC Research.

News that another Covid vaccine has proven successful in trials has raised the chances of a more rapid lifting of activity restrictions in some advanced economies, and potentially better economic performance from mid-2021.

However, most emerging markets are unlikely to get as quick access to the three most promising vaccines, resulting in slower normalisation. What’s more, the speed of the rollout of vaccination programs is uncertain.

At the close of local trade, the rand quoted 0.92 percent weaker at R15.41/$, after trading in range of R15.23/$ - R15.42/$.

Households reluctant to take on credit in Q4

Seasonally adjusted claims on the domestic private sector rose by 1.1 percent m-o-m in October.

This follows two consecutive m-o-m declines in private sector credit claims. In fact, this is the strongest m-o-m growth rate in credit since April, with claims having fallen in four out of the five months leading to October.

Growth in claims on households dropped further from 3.2 percent y-o-y in September to 2.9 percent y-o-y in October.

Corporations, in turn, saw a slight increase in credit growth, with the y-o-y expansion increasing from 3.1 percent y-o-y to 3.5 percent y-o-y.

This brought the annual growth rate for total private sector credit to 3.2 percent, slightly higher than the 3.1 percent y-o-y figure recorded in September – the latter representing a multi-year low.

The primary driver behind the 1.1 percent m-o-m increase in claims on the private sector in October was the ‘other loans and advances’ category, the latter rising by 2.7 percent m-o-m, accompanied by a 0.3 percent m-o-m increase in mortgage advances.

BUSINESS REPORT ONLINE

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