South Africa Credit Growth Slows In July

South African credit growth slowed in July for the first time in four months, dropping back to an annual 19.8 percent, as higher interest rates crimped consumer spending on items like cars and furniture. Growth in borrowing by households and companies slowed from a revised 20.4 percent in June, according to the latest data from the Pretoria-based central bank said on its Web site today.

The central bank has raised its benchmark interest rate six times to 12 percent since June 2007 to tame inflation, which has exceeded its 6 percent target for more than a year. Vehicle sales plunged an annual 20 percent in July, according to an industry body, while retail sales dropped for a fourth consecutive month in June, falling 2.6 percent from a year earlier.


The slowdown in credit growth may help ease inflation at the same time that lower oil costs curb price pressures. The inflation rate, which reached 13 percent in July, may fall ``significantly'' in the last quarter, Governor Tito Mboweni said on Aug. 14, after leaving interest rates unchanged.

The broad M3 measure of money supply rose an annual 18.5 percent in July, compared with a revised 20.3 percent in June.