Spark ATM Systems has released its Spark Cash Index for July, measuring the average value of cash withdrawals across more than 1,700 ATMs across South Africa. The numbers reveal year-on-year growth of about 4 percent in cash withdrawals for the month, further contributing to strong growth so far in 2012.
Marc Sternberg, managing director of Spark ATM Systems, said that year-over-year growth has risen in each of the past seven months, suggesting that consumer spending is growing at a faster rate than it did in 2011.
The recent repurchase rate cut is particularly timely for retailers and should ensure that cash withdrawal and consumer spending activity remains strong for the remainder of 2012, Sternberg said. "This is the first interest rate cut since November 2010, and historically the SCI has recorded an uptick in cash withdrawal activity post a reduction in the prime interest rate.
"This shot in the arm to consumers' disposable income will ensure that they pay less interest on debt, effectively stimulating consumer spending activity for the remainder of 2012."
David Wilson, senior analyst at IHS Global Insights, said the full impact of the interest rate cut on consumer spending will be felt toward the end of 2012. "To date, consumers have remained cautious of spending, fueled by recent factors such as electricity tariff increases in the winter months. However, the recent interest rate cut will most probably boost spending and thus cash withdrawals again in the coming months."
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