The rand and bond market in South Africa are at one that the indefinite delay in South Africa’s producer price index (PPI) is causing the country’s reputation harm on the global stage.
I-Net Bridge spoke to dealers and portfolio managers in the rand and bond markets on Monday and they said that the untimely delays were causing damage.
One market analyst noted that it would have been better to have run parallel numbers before converting to new measurements, meaning that the old system should still provide official statistics for the time being.
“I can’t understand why Statistics South Africa doesn’t publish the old series. It is giving the country a bad reputation we hardly need,” said a bond portfolio manager.
“With our current-account deficit and political risk, statistics is one thing we need certainty on, but we can’t even get that right,” he concluded.
A rand dealer noted that the PPI delay was another negative being added to a number of others in the rand market on Monday morning.
The rand is testing the R8 to the dollar level in the face of global risk-aversion headwinds.
“Some statement is needed on the PPI — it is becoming a bit embarrassing for the country,” said the rand dealer.
Statistics South Africa said on Friday that the PPI for January had been delayed until further notice due to continuing technical difficulties related to capturing new weightings on their system.
The data was expected at 3pm on Friday after being delayed from an initial release date of 11.30am on Thursday.
The delays on the PPI have sparked some talk and rumours in the market that there may be something else going on. However, most analysts and dealers are taking Statistics South Africa at their word that the delay is due to technical problems with the new data series.
The new weights are to be based not only on updated information but also a change in the approach used to derive the weights at the higher industry grouping level, says Statistics South Africa.
In addition, the introduction of new weights provides an opportunity to change the presentation of the headline PPI. These changes are consistent with international best practice and achieve a greater degree of consistency between the PPI and the system of national accounts than has been the case in the past.
To their credit, a Statistics South Africa spokesperson said it was necessary to ensure everything was 100% correct before publishing the data. However, to be weighed against this is the uncertainty being created in the interim. — I-Net Bridge