WEDNESDAY, 6.30PM
BUSINESS confidence was up last month. thanks to the stability of the rand, the possible peaking of the inflation rate and a sustained inflow of foreign capital.
“The business mood remains cautiously optimistic,” South African Chamber of Business economic policy director Ben van Rensburg said on Wednesday, announcing that the Sacob monthly business confidence index (BCI) added 0,3 percentage points in April to 114, the highest in seven months.
Van Rensburg said the perception that crime was not being effectively dealt with was eroding confidence. “Crime remains the greatest single threat to continued business confidence.”
Van Rensburg said it was unlikely rates would fall before the third quarter of the year, thus extending high interest rates deep into the economic slowdown. The Reserve Bank would likely keep monetary policy tight for much of the year to attract funds once exchange controls were relaxed in July.
Van Rensburg said the continued strength of the rand might have negative effects on the value of South African exports. The high level of interest rates would weigh heavily on home owners and small and medium sized businesses.