South African Reserve Bank Governor Tito Mboweni warned consumers on Wednesday to tighten their belts further as higher food and fuel prices fan out into wider inflation. South Africa’s targeted CPIX inflation has surged through the top end of the bank’s 3%-to-6% band and hit a high of 9,4% year-on-year in February.
South African legislators have recommended that Parliament revise laws to give it more oversight over the Reserve Bank, raising concerns of political interference in monetary policy as inflation soars. The Reserve Bank has raised its repo rate by 400 basis points to 11% since June 2006 to try to tame inflation.
South Africa’s power situation has improved after a two-day crisis that threatened supplies to mines, state electricity firm Eskom said on Wednesday, but rolling cuts are set to continue. Eskom has been struggling to contain South Africa’s power crisis, the result of years of underspending on electricity generation capacity.
South Africa’s economy will slow in 2008 although local banks are coping well and there is no cause for alarm, Reserve Bank Governor Tito Mboweni said on Wednesday. He also said a weaker rand currency would, over time, help to narrow the current-account deficit — which stood at a hefty 7,5% of gross domestic product in the fourth quarter of 2007.
South Africa recorded a current-account deficit of 7,5% of GDP in the fourth quarter of 2007 from 8,1% previously, the South African Reserve Bank (SARB) said on Wednesday. Governor Tito Mboweni said that the deficit on the current account was more than fully financed through inflows of financial capital, and the SARB continued to build up international reserves.
A weaker rand currency and rising international food and fuel prices continue to cloud the prospects for South African inflation, the central bank said on Wednesday. Reserve Bank Governor Tito Mboweni added that the bank must remain vigilant on the wider impact of higher food and fuel costs.
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/ 7 February 2008
The Young Communist League (YCL) on Thursday blamed the media for ”wittingly or unwittingly” misleading the public on comments made by South African Reserve Bank Governor Tito Mboweni. The league held a teleconference with Mboweni on Thursday during which his comments about certain African National Congress members and inflation-targeting were discussed.
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/ 4 February 2008
South Africa’s power crisis may already have damaged economic growth, even though the country’s mines have bounced back after electricity shortages brought production to a halt. The longer it takes Eskom to boost energy output for industry, the greater the chances that 2007 could have marked the end to four years of brisk economic growth.
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/ 31 January 2008
Press photographers were again barred from attending a press conference where South African Reserve Bank (SARB) Governor Tito Mboweni announced the latest repo-rate decision on Thursday. It is the second time that photographers have been barred from taking pictures of Mboweni at the SARB press conference.
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/ 21 January 2008
It is almost inconceivable that the South African Reserve Bank’s (SARB’s) Monetary Policy Committee would raise interest rates in the current atmosphere, according to strategist for Investec Securities, Brian Kantor. "I would not have raised the last two times. It is quite clear now that the last increase was over the top," he said,
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/ 18 January 2008
Chief economist of Citigroup in South Africa Jean Mercier says foreigners see more political risk in South Africa now than they have over the past few years, and will be keenly monitoring any "new faces", especially in the key finance and Reserve Bank positions, as these people may be untested at high-level economic decision-making.
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/ 10 January 2008
Finance Minister Trevor Manuel said on Thursday that he did not have any concerns about the direction fiscal policy might take following the victory of Jacob Zuma at the African National Congress’s leadership conference in Polokwane last month. He said fears about fiscal policy were just so much hype.
The JSE was firmer by midday on Tuesday as a weaker United States dollar helped precious metals boost mining stocks on the bourse. By noon, the broader all-share index was 0,57% better, led by a 1,74% climb in the gold-mining index. The platinum-mining index gained 1,4% and resources added 1,17%.
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/ 24 December 2007
Jacob Zuma, the new leader of the African National Congress said on Sunday that he would look at inflation targeting, a key monetary policy tool used by the Reserve Bank to reign in inflation. The country adopted the policy in 2000 as a framework through which the central bank estimates a ”target” inflation rate.
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/ 19 December 2007
South African consumer inflation raced further away from the central bank’s band in November, backing the case for another interest rate rise, despite a slowdown in retail sales. The targeted CPIX gauge — which strips out mortgage costs — jumped to 7,9% year-on-year from 7,3% in October.
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/ 6 December 2007
South Africa will not include maize in the initial stages of the country’s biofuels policy in order to keep a lid on high food prices, the Department of Minerals and Energy said on Thursday. The decision followed the South African Cabinet’s approval of a long-awaited biofuels plan, which officials hope will revive the ailing agriculture industry.
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/ 6 December 2007
South African markets were expecting slightly more hawkish rhetoric by the South African Reserve Bank than transpired on Thursday and now feel inflation is fairly close to its peak. The bond market, especially at the previously sold-off short end, has reacted favourably.
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/ 6 December 2007
South African Reserve Bank Governor Tito Mboweni on Thursday raised the repo rate by 50 basis points following a two-day meeting of the bank’s monetary policy committee. The increase pushes the repo rate to 11%, the prime overdraft rate to 14,5% and the tightening cycle that began in June last year to 400 basis points.
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/ 5 December 2007
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South Africa’s economic boom looks set to persist but concerns linger over the direction of policy after the crucial African National Congress (ANC) conference, which seems likely to choose Jacob Zuma as the ruling party’s new leader. Economic growth jumped to 5,4% in 2006 — its fastest rate since 1981 — and wealth is spreading to a burgeoning black middle class.
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/ 5 December 2007
The JSE remained firm at noon on Wednesday in line with overseas markets, while ongoing mergers and acquisitions talk and higher commodity prices boosted miners. But investors remained jittery ahead of the local central bank’s interest rate decision on Thursday afternoon.
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/ 30 November 2007
South African Reserve Bank Governor Tito Mboweni said on Thursday evening that inflation-targeting would be here "for many years" and economic policy is not going to change in South Africa as the foundations built up by President Thabo Mbeki, himself and Finance Minister Trevor Manuel were too strong to be weakened.
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/ 29 November 2007
South Africa’s factory-gate inflation ticked up to 9,5% year-on-year in October, data showed on Thursday, beating forecasts and reinforcing expectations for an interest-rate rise next week. Producer price inflation accelerated from 9,4% year-on-year in September, and outstripped forecasts of a 9,1% rise, Statistics South Africa said.
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/ 23 November 2007
The South African Parliament officially closed for the year on Thursday with MPs voting for a 7,6% salary increase for President Thabo Mbeki, to R1,27-million a year, backdated to April 1. It was far short of the nearly 60% increase from R1,18-million to R1,89-million recommended by the independent Moseneke Commission in its review of salary packages for public office-bearers.
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/ 14 November 2007
South Africa’s retail sales growth slowed to 2% year-on-year in September at constant prices, data showed, but analysts said this was likely not enough to hold off another interest rate hike in December. Retail sales growth slowed from a downwardly revised 6,6% in August, Statistics South Africa said on Wednesday.
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/ 14 November 2007
The Governor of the Reserve Bank, Tito Mboweni, gave a very strong signal that another interest hike is on the way when he told members of Parliament that in his opinion, rates should go up. The bank staff’s forecast for inflation in the coming months shows inflation increasing above the 6% target for part of 2008.
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/ 13 November 2007
If the South African Reserve Bank is consistent, then inflation matters have deteriorated since October and another rate hike can be expected in December, according to Dr Azar Jammine, director and chief economist of Econometrix. However, Jammine on Monday also criticised some of the thinking in this regard.
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/ 10 November 2007
Eskom is looking at the possibility of increasing electricity tariffs by 18%, South African Broadcasting Corporation (SABC) news reported on Friday. Eskom said the cost of building power stations — at R1,13-trillion over the next 20 years — and the rise in coal prices are to blame for the possible increase.
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/ 8 November 2007
Global economic power relations, the commodity cycle and food prices are some of the issues to be discussed at next week’s Group of 20 (G20) meeting in South Africa. Finance Minister Trevor Manuel said the meeting is ”probably the most significant gathering of economic policymakers we’ve ever had in South Africa”.
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/ 6 November 2007
The South African Reserve Bank (SARB) said on Tuesday in its latest <i>Monetary Policy Review</i> that in light of the risks around the subprime crisis in global markets, it is important to maintain a stable and transparent monetary policy regime. Authorities in some emerging markets have been advised to strengthen surveillance.
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/ 31 October 2007
Broad-based price increases in South Africa’s economy showed there was a problem that needed to be ”handled”, Reserve Bank Governor Tito Mboweni said on Tuesday. Speaking in Johannesburg, he also warned that, in general, faster inflation meant tighter monetary policy.
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/ 29 October 2007
Growth in demand for credit from South Africa’s private sector slowed in September, but remained above forecasts, keeping up pressure for higher interest rates. Credit growth eased to 22,46% year-on-year from an upwardly revised 23,16% in August, while money supply growth also eased to 24,94%.
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/ 16 October 2007
South African Reserve Bank Governor Tito Mboweni said on Tuesday that the bank expected inflation to peak in February 2008 and then gradually come back to the bank’s 3% to 6% target range. Mboweni said in a speech in Johannesburg that economic growth of above 4,5% was contributing to inflation.