South Africa’s hike in its policy rate on Wednesday failed to impress traders who sold off the rand within 15 minutes of the hike announcement, driving it down by more than 3 per cent to 11.33 to the US dollar.
Speaking after the hike was announced, Ishitaa Sharma, a FX and rates strategist at Citibank said: “The markets are telling central banks they have to be a lot more consistent in their hawkishness.”
In advance of the South African rate hike, the rand had already weakened to 11.17 to the US dollar, a slide of 1.8 per cent. After the announcement, though, the rand fell further. Continue reading »
To hike or not to hike.
That will be the conundrum facing South Africa’s monetary policy committee as it began its first meeting of 2014 on Monday against a backdrop of emerging market turmoil and a tumbling currency. Continue reading »
With elections just months away, President Jacob Zuma and his ruling African National Congress party would have been wishing for some positive economic news as campaigning intensifies against a backdrop of stubbornly high unemployment and lacklustre growth.
But after a turbulent 12 months during which the pace of growth in Africa’s largest economy dipped to its slowest level since a 2009 recession, the first weeks of this year have offered little respite. Rather, more challenges lie ahead as domestic and external factors look set to combine to heap pressure on the country’s economic performance. Continue reading »
Last year, South Africans had to get used to the rand at 10 to the dollar – in 2012, 8-9 was the norm.
Now, it looks like 11 to the dollar may become the new normal. The rand on Thursday hit a 5-year low to the dollar of over 10.8, having depreciated from around 10.5 at the end of December. Continue reading »
By Kevin Lings of Stanlib
Nelson Mandela has had an unprecedented calming and positive influence on South Africa’s political, economic and social environment for almost 25 years. His life-long quest for peace and reconciliation disarmed even the staunchest opponent, allowing diverse groups of people to work together in a way that seemed unimaginable prior to the ending of apartheid. It is time for the political, business and labour leadership of South Africa to honour his legacy and move this country forward to the benefit of all. Continue reading »
It’s clear that South African growth has stalled – Q3 figures out on Tuesday confirmed another quarter of sluggish growth of 0.7 per cent compared to the previous quarter, or 1.8 per cent year on year – below consensus estimates.
So what’s the problem – and what can policy makers do? Here is a selection of analyst comments. Continue reading »
By Annabel Bishop of Investec
South African growth has been getting steadily weaker; strikes and poor electricity supply have taken their toll; and the current account deficit is not improving. It wasn’t always like this. Continue reading »
South Africa has come a long way in 20 years, but last year’s violent mining strikes and sluggish growth has knocked confidence. Colin Coleman, managing director and partner at Goldman Sachs, discusses with William Wallis the country’s challenges.
After the odd glimmer of hope (in macro data terms), South Africa is back on a downer. Retail sales for September came in on Wednesday well below analyst consensus, at a weak 0.2 per cent year on year, and a miserable contraction of 0.7 per cent month on month. The year on year figure hasn’t been this low since late 2009.
The consensus was for 2.5 per cent growth year on year. What went wrong? Continue reading »
Nearly 20 years on from the end of white minority rule and a programme of black economic empowerment, South Africa continues to suffer widespread inequality, poverty and unemployment. Andrew England reports on the country’s challenges and aspirations.
South Africa’s interim Budget (the Medium Term Budget Policy Statement) was announced on Wednesday by the National Treasury.
Here are the four crucial figures, with analyst comment from Nomura’s Peter Attard Montalto. Continue reading »
South Africa’s finance minister Pravin Gordhan says the knock-on effect of the Fed’s tapering announcements has taught the US and emerging economies valuable lessons. He talks to Andrew England about how governments can navigate markets more smoothly.
Should South Africa have a debt ceiling? The question was raised in a report earlier in October by the IMF, which suggested that the country might want to put one in place as its fiscal position deteriorates.
But in London on Tuesday, South African finance minister Pravin Gordhan dismissed the idea, suggesting that the Fund was barking up the wrong tree. Continue reading »
Basic economics says that a falling currency should help the trade balance: exports are cheaper and more competitive, and imports are curbed. So much for theory. South African policy makers must be banging their heads on their desks. You can imagine the cry: come on! When is the falling rand going to give us a break?
The country’s trade balance for August is in, and it’s not good: a negative score of R19.1bn ($1.9bn), from a trade deficit of R13.1bn in July. Analysts had predicted a drop of R13.9bn. Continue reading »