SARB hikes repo rate to 7% in line with inflation-targeting mandate

In a recent speech, the South African Reserve Bank (SARB) pointed to a key threat facing the SA economy. Like many other net commodity-exporting nations, SA has faced a terms-of-trade (export prices relative to import prices) shock as a result of the persistent decline in commodity prices since 2011.. Click here to read more. Tweet

Making sense of the March US Federal Reserve rate-setting meeting

In line with the consensus expectation (see chart 1) the US Federal Reserve (Fed) left interest rates on hold at the March rate-setting meeting at the effective rate of 0.36%. The Fed continues to face conflicting signals in the real economy. While labour market data paints a robust employment picture in the US, growth momentum […]

SA businesses facing increased uncertainty

The Global Economic Conditions Survey (produced by the Association of Chartered Certified Accountants) revealed that global firms remained gloomy about their prospects in 4Q15. The survey reported that 44% of respondents were less confident than they had been three months earlier; only slightly fewer than in 3Q15, when businesses were at their most pessimistic in […]

SA Budget FY2016/17 – delaying difficult decisions

Budget a relief for equities, but negative for the currency and bonds The tax measures announced in the February 2016 budget were less detrimental to the SA consumer than feared. In reaction to the announcement, the FTSE/JSE ALSI reacted positively, regaining some lost ground to close 0.9% lower on Wednesday from 2.0% lower prior to […]

SARB raises rates by 50 basis points amid weak growth

SARB Monetary Policy meeting – 28 January 2016 – Asset Management Despite signs of a weakening domestic economy, the South African Reserve Bank (SARB) raised interest rates by 50 basis points in an effort to contain rising prices. A sharp 12.9% depreciation in the trade-weighted currency since the November meeting, drought-inflicted food price shocks and […]

Making sense of the September US Federal Reserve rate-setting meeting

Recent global turmoil, tighter monetary conditions and low inflation keep US interest rates on hold Although the US Federal Reserve (Fed’s) growth and unemployment forecasts have improved relative to their June 2015 economic projections, they have become more sanguine on the medium-term inflation outlook. That being said, they still expect inflation to meet their 2% […]

Retail sales growth exceeds market expectations

Growth in building material sales outperforms Stats SA reported a 3.3% y/y rise in retail sales volumes in July, lower than the (upwardly revised) 3.8% y/y growth rate reported in June, but notably higher than the 2.4% y/y increase captured by the INET BFA consensus estimate. Building material sales volumes continued to track well, increasing […]

Expenditure side of SA GDP reflects pressure on demand

Growth in domestic demand underperforming growth in overall GDP The South African Reserve Bank’s (SARB) Quarterly Bulletin confirmed that real GDP growth slowed to 1.6% y/y in 2Q15 from 2.0% y/y in 1Q15. The expenditure breakdown of GDP also highlighted slower growth in domestic demand relative to the performance in overall economic activity. Over the […]

No quick turnaround expected in SA’s mining and manufacturing sectors

Weak mining activity outside of platinum production Growth in Stats SA mining production volumes increased by 5.6% y/y in July, increasing from the 5.4% y/y rise in volumes in June. Volumes lifted by 1.1% in month-on-month terms in July, following a 2.0% m/m increase in the previous month. The strike-impacted base in the platinum sector […]

Fall in business confidence reflects a weaker domestic trading environment

Pessimism across the board The Bureau of Economic Research’s (BER) Business Confidence Index (BCI) plunged to 38 index points in 3Q15, from 43 points in 2Q15. Business confidence levels have averaged at an unfavourable 43 index points since the Global Financial Crisis (GFC), reflecting soft economic conditions and an adverse environment for South African businesses […]

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