Annual growth in broad money supply decreased to 5.7% in April after an unexpected rise to 6.8% in March.Overall credit demand by households decreased to 3.4% y/y from 3.7% y/y previously. Mortgage advances—which make up a significant 59% of household credit—fell further to 2.8% y/y from 3.0% and 3.3% y/y recorded in March and February respectively.
“Once the cutting cycle commences, it will provide the indebted with some relief and should boost sentiment, supporting the property market.”“All the subcategories, except overdrafts, experienced either further growth moderation or a decline as the impact of higher interest rates continued to bite, poor economic prospects and the poor labour market eroded household confidence, and commercial banks were more cautious in extending credit,” it said.
While real incomes will recover as inflation recedes, the pressure from high interest rates will likely persist for longer amid sticky global and domestic price pressures, it said.