Johannesburg - Growth in credit demand by South Africa's private sector slowed to 8.64 percent year-on-year in January, compared with a 10.09 percent rise in December, central bank data showed on Thursday.

Expansion in the broadly defined M3 measure of money supply accelerated to 6.75 percent year-on-year in January after rising by 5.17 percent the previous month, the South African Reserve Bank said.



The growth in credit extension fell short of our expectations with a moderation to 8.6 percent year-on-year in January. This seems to be mostly owing to the corporate sector as credit extended to households maintained its December growth rate at about 9.9 percent. The ongoing weakness in the mortgage market is striking - mortgage advances were virtually unchanged from December.


The rand was at 8.8440 against the dollar at 0607 GMT from 8.8450 before the data was released at 06.00 GMT. The yield on the 2015 bond was slightly higher at 5.270 percent, as was that for the 2026 paper, which was yielding 7.305 percent.


- Credit demand growth has been in positive territory since May 2010, although its recovery has been somewhat constrained by high unemployment and an uncertain outlook for companies.

- The ratio of household debt to disposable income remains extremely high at 76 percent while unemployment remains around 25 percent.

- The Reserve Bank's benchmark repo rate is at a four decade low of 5.0 percent. The central bank left it unchanged in January, citing concerns about rising food prices and a depreciating rand exchange rate in a period of slowing growth. - Reuters