In the second half of 2006, domestic household consumption demand growth also continued at a robust pace of around 7 per cent per annum, while the various consumer confidence indices indicated sustained optimism on the part of consumers despite the tightening stance of monetary policy. Towards the end of the year, motor vehicle sales, particularly passenger vehicles, showed some signs of moderation.
Underpinning this consumer exuberance were strong rates of growth of credit extension, despite an increase in securitisation transactions. Following the 15-per-cent depreciation of the effective exchange rate from May to July 2006, the exchange rate of the rand had an impact on the inflation outlook.