Browsing: South African Reserve Bank (SARB)

• Experts warn South Africa’s growth is too low to create enough jobs to absorb new workers entering the labor market.
• The country’s fiscal position is projected to deteriorate due to weakening mineral revenue. Utility Eskom’s debt bailout, wage bill, and rising debt pile more pressure.
• As a result, public debt is not expected to stabilise. And headline inflation will return to the midpoint of the target range by end 2024.

South Africa’s real GDP growth is projected at 0.1 percent in 2023, reflecting a significant increase in the intensity of power outages, and weaker commodity prices and external environment.

According to the International Monetary Fund (IMF), annual growth is expected at about 1.5 per cent over the medium term. The country is under vice-like grip of long-standing structural impediments.

South Africa’s power outage woes

For instance, South Africa is struggling with product and labor market rigidities. It …

• South African Reserve Bank administers “bitter medicine”, raises key rate to 8.25 percent to tackle inflation.
• Trading Economics states South Africa’s average food price inflation was 6.07 percent annually between 2009 and 2022.
• Within the last three months of 2022, South Africa’s economic development has stumbled below pre-pandemic levels.

South African Reserve Bank has raised the benchmark interest rate to 8.25 percent, a 14-year high as policymakers move to tackle escalating inflation. Borrowers are set for tough times as Governor Lesetja Kganyago administers “bitter medicine” on the economy in the face of worsening inflation.

Globally, economies have been tightening fiscal stance to contain inflation in step with US Federal Reserve move to increase rates to check the rising cost of living.

South African Reserve Bank forced to increase rate

Since utility Eskom resorted to power cuts, South Africa has been plunged into numerous economic disruptions. As a result, this is …

• South African Reserve Bank (SARB) announced a 25 basis points hike, taking the repurchase rate (repo rate) to 7.25 per cent from 7 per cent.
• The prime lending rate will increase from 10.5 per cent to 10.75 per cent.
• Inflation in South Africa was reported to have eased to 7.1 per cent in December 2022.

The South African Reserve Bank (SARB) has announced a 25 basis points hike, taking the repurchase rate (repo rate) from 7 per cent to 7.25 per cent. The prime lending rate in the country is expected to increase from 10.5 per cent to 10.75 per cent as a result of the change, which will come into effect on January 31, 2023.

The repo rate, also known as the repurchase rate, is the rate at which the South African Reserve Bank lends money to commercial banks. The SARB, and essentially all central banks, use the repo …

The International Monetary Fund (IMF) executive board approved $4.3 billion requests for emergency financial from South Africa to address the challenging health situation and severe economic impact of the COVID-19 shock.

The funds are under the Rapid Financing Instrument (RFI) which aims at meeting the urgent balance of payment (BOP) needs stemming from COVID-19 pandemic outbreak, limit regional spillovers and catalyze additional financing from other international financial institutions.

The outbreak of the pandemic has led to a sharp economic contraction and significant financing need in South Africa.

Over the last decade, economic activity in the country has weakened despite government spending, this has resulted in increased poverty, unemployment and income inequality.

“South Africa’s economy has been severely hit by the COVID-19 crisis, reporting the highest number of cases in sub-Saharan Africa. A deep economic recession is unfolding as the decline in domestic activity and disruptions in the global supply chain …