SA credit growth leaps to 22.62%

The Reserve Bank says growth in demand for credit by South Africa's private sector jumped from 20.79% in February to 22.62% year on year in March.

This was a good deal higher than the 20.5% forecast in a poll among economists.

Analysts said the data, following hard on the heels of strong inflation numbers last week, would push the Reserve Bank towards further monetary policy tightening.

"Nobody is going to like this. Everyone was hoping for lower figures," Brait Merchant Bank economist Colen Garrow said. "This gives the Reserve Bank ammunition for a rate hike at their June meeting. The numbers should have slowed down much more."

Rand weaker
The rand was marginally weaker after the data but government bond yields surged as investors raised the probability of more rates hikes.

The yield on the 2015 bond was 5 basis points up at 9.515% for the session at 0632 GMT, after touching 9.56% earlier.

The central bank raised its repo rate by 50 basis points to 11.5 % earlier this month, bringing to 450 basis points the total increases since June 2006.

Strong inflation data and hawkish comments from Reserve Bank Governor Tito Mboweni had raised speculation rates will continue to rise.

Mboweni last week even hinted that the monetary policy committee may not wait for its scheduled June meeting to move on rates again. – additional reporting by Reuters