South Africa in State of Purgatory, while Ramaphosa idles in “Zuma-esque” Paralysis
It was with great relief when Zuma stepped down as president of the Republic and Hope re-appeared like a silver lining on the horizon as Cyril Ramaphosa took over the reins of an economically and socially battered country.
But this hope has faded, first slowly in disbelief, now much faster in light of clear facts. The former horror-cabinet based on nepotism and backdoor-deals is back with only a few incompetent faces being replaced. Crucial departments are run by the same clique, which already signed a note of intellectual bankruptcy in the past and created politically questionable precedents, ignoring any tact or reason. The Department of Home Affairs is the laughing stock of the migration experts on the continent, Human Settlements …
6 Reasons why the Rand is under severe Pressure
The weekend slide in the rand has caused many to panic, with some analysts attributing it to South African failures, presidential inefficiencies and other local elements. The truth, however, is far more complex. This is according to Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions who said that the first key element to note is that this decline is not confined to South Africa. “Emerging markets as a whole have suffered severe blows due to the sell-off of riskier assets by investors, and there are many factors contributing to this sell-off,” she said.
In the following she outlined six of the biggest reasons for the rand’s decline:
Global Trade War
The trade war has played a key role in the global econo…
Rand Weakness excellerates in Light of Emerging Markets
The rand shot past R14 to the dollar on Friday afternoon, after emerging market currencies crashed and tensions in the global trade war heated up.
By 15h45 on Friday afternoon, the rand toppled almost 3% from its open at R13.74 to sit at R14.12, the weakest point since November 2017.
“The rand and other EM currencies on the back foot as sentiment sours,” Rand Merchant Bank analysts said in a note on Friday, adding that this was due to “geopolitical concerns and the negative impact of the U.S.-China trade spat on global growth.”
Notably, the weakening of the rand is in line with other emerging market currencies dropping, headlined by the Turkish lira, which saw a 12% crash that triggered a global wave of turbulence.
Load-Shedding Risk remains
Eskom said the high-risk period for loadshedding on 1 August has passed with a need for such blackouts. There is a risk of loadshedding starting at 5AM on 2 August, the company said, but “it will only be implemented if absolutely necessary.” Eskom said yesterday there is a “high risk” of Stage 2 loadshedding tonight between 17:00 and 21:00, peak usage time in South Africa.
This following two days of industrial action to impact operations at Eskom’s sites, the power utility said in a media statement.
Stage 2 calls for 2000MW to be rotationally load shed nationally at a given period. Eskom has sought the services of the Commission for Conciliation, Mediation and Arbitration (CCMA) to facilitate the engagement between the organisation…
Unemployment Rate increased to 27.2% !!
The unemployment rate in South Africa increased to 27.2 percent in the second quarter of 2018 from 26.7 percent in the previous period.
The number of unemployed rose by 103 thousand to 6.08 million while the number of employed fell by 90 thousand to 16.29 million.
Unemployment Rate in South Africa averaged 25.57 percent from 2000 until 2018, reaching an all time high of 31.20 percent in the first quarter of 2003 and a record low of 21.50 percent in the fourth quarter of 2008.
Rate Hike looms in light of Rand Weakness
The Rand’s plunge to the weakest in almost seven months against the dollar may push up South African inflation and necessitate interest-rate increases, SARB Deputy Governor Kuben Naidoo, currently in Portugal, said. While the SA Reserve Bank (SARB) doesn’t target a specific level of the rand, it responds to second-round effects on prices from currency weakness. “If we do think there is a risk of second-round effects, we will have to act,” he said. Inflation was 4.5% in April, in the middle of the central bank’s target range. “But if it rises and if it’s forecast for rise, we will have to act.”
The Reserve Bank held its key rate at 6.5% last month after cutting in July and March, citing the cost of oil and wage increases as risks to th…
YOUTH DAY ... and what it stands for
On June 16, 1976, a demonstration in Soweto, led largely by high school students angered at the apartheid government, was met with a brutal crackdown by police and set off a wave of protests and violent conflicts across South Africa. The day is now immortalised as Youth Day, an annual public holiday in which South Africans remember the significance of the Soweto uprisings and the bravery of those involved, as well as the importance of supporting the youth across the country.
Construction has begun on R 3bn Smart Eco City "Sandton Gate"
Construction on Sandton’s new ZAR 3 billion smart eco-city, Sandton Gate, has begun, with co-developers Abland and Tiber Construction breaking ground on the first phase.
According to Abland, the first phase of the development will see the construction of over 30,000 square metres of mixed-use space, including premium-grade office space, a residential block and amenities like a gym.
The commercial and residential components will also be developed over this period.
The Sandton Gate precinct is envisioned as an eco-friendly smart mini-city, that will serve as a commercial and residential hub within the greater Sandton area.
It will be located on William Nicol Drive, in the middle of four commercial nodes, namely Sandton CBD, Bry…
Another huge Petrol Price Hike on the Cards
South Africans can expect a massive increase in the fuel price when they fill up at the pumps next week, thanks mainly to rising international oil prices. Brent crude oil traded at around US$ 76 on Tuesday, having peaking above $80 earlier in the month, and with analysts noting that prices could head toward $100 a barrel.
Rising oil prices, in tandem with a softer Rand in May, means that the fuel price is expected to edge closer to ZAR 16 per litre to new record highs in June.
The latest date from the Central Energy Fund shows that the petrol price is likely to increase by around 85 cents, with diesel up 85 cents, and paraffin by 83 cents in a month when more is consumed.
Commenting on unaudited mid-month fuel price data release…
Interest Rates remain unchanged
The monetary policy committee of the South African Reserve Bank has decided to keep the repo rate unchanged at 6.5%, in line with the expectations of economists. At its previous meeting in March the MPC decided to cut interest rates by 25 basis points to make the repo rate 6.5%, and the prime lending rate 10%. The repo rate is the benchmark interest rate at which the central bank lends money to commercial banks and the prime rate the rate at which commercial banks lend money to borrowers.
SARB governor Lesetja Kganyago said the decision to keep the repo rate unchanged was unanimous: "At [6.5%], the MPC still assesses the stance of monetary policy to be accommodative and appropriate given the forecast inflation trajectory and the curre…