According to data released by the South African Reserve Bank (SARB) on Thursday South Africa’s money supply and private sector credit grew at weaker pace in February. M3 grew 6.63 percent year-on-year in February, slower than the 7.91 percent increase in the previous month. Money supply growth rate missed expectations to remain at 7.9 percent.
Private sector credit climbed 5.26 percent annually, following a 5.52 percent rise in January. The annual growth was also weaker than the expected 5.3 percent.
The South African Reserve Bank will announce the Monetary Policy Committee’s decision on repo rates at 1300 GMT and analysts largely expect the central bank will keep benchmark lending rates on hold at 7 percent at its policy announcement.
South Africa’s rand firmed against the dollar early on Thursday ahead of the central bank’s interest rates decision, but looked vulnerable to speculation of an imminent cabinet shake-up that could see Finance Minister Pravin Gordhan removed.
USD/ZAR was trading at 12.87 at around 1050 GMT, down 1.21 percent on the day. The pair hit near 3-week highs of 13.1578 on Wednesday’s trade. Momentum studies on daily charts are neutral and the pair is hovering around 20-DMA at 12.8715. A decisive close below could see further drag lower.