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Business Recorder
04-07-2025
- Business
- Business Recorder
South African rand falls, US bill and tariff updates in focus
JOHANNESBURG: The South African rand fell on Friday as traders mulled the impact of U.S. President Donald Trump's sweeping tax-cut and spending bill and as pressure mounted on countries to secure trade deals before the United States' July 9 deadline. At 1251 GMT, the rand traded at 17.6250 against the dollar, roughly down 0.6% on Thursday's close. The U.S. Republican-controlled House of Representatives narrowly passed Trump's 'One, Big, Beautiful Bill' of spending and tax cuts. 'The upside to this bill is that it will likely boost U.S. demand in the short-to-medium term. The downside is that forecasts are pessimistic on whether it will successfully generate enough GDP growth to outpace the increased spending,' ETM Analytics said in a research note. Like other risk-sensitive currencies, the rand often takes cues from global drivers like U.S. policy and economic data in addition to local factors. South Africa and many other countries are scrambling to agree trade deals with the United States before the deadline. But the U.S. leader said Washington will start sending letters to countries on Friday specifying what tariff rates they will face on imports to the U.S., a clear shift from earlier pledges to strike scores of individual deals. Traders' domestic focus will be on June foreign reserves data on Monday and May manufacturing production figures on Thursday for insight into the health of Africa's most-industrialised economy. The Johannesburg Stock Exchange's Top-40 index was last down 0.2%. South Africa's benchmark 2035 government bond was slightly weaker, as the yield rose 1 basis point to 9.745%.
Reuters
04-07-2025
- Business
- Reuters
South African rand inches up; US bill and tariff updates in focus
JOHANNESBURG, July 4 (Reuters) - The South African rand inched up against a weaker dollar in early trade on Friday, as traders considered the impact of the sweeping tax-cut and spending bill U.S. President Donald Trump is about to sign into law and as pressure mounted on countries to secure trade deals before the United States' July 9 deadline. At 0700 GMT the rand traded at 17.5250 against the dollar , just 0.1% firmer than Thursday's closing level. The U.S. Republican-controlled House of Representatives narrowly passed Trump's "One, Big, Beautiful Bill" of spending and tax cuts. "The upside to this bill is that it will likely boost U.S. demand in the short-to-medium term. The downside is that forecasts are pessimistic on whether it will successfully generate enough GDP growth to outpace the increased spending," ETM Analytics said in a research note. Like other risk-sensitive currencies, the rand often takes cues from global drivers like U.S. policy and economic data in addition to local factors. Domestically focussed traders will also eye June foreign reserves (ZAFXRS=ECI), opens new tab data on Monday and May manufacturing production (ZAMAN=ECI), opens new tab figures on Thursday for insight into the health of Africa's most industrialised economy. South Africa along with many other countries are scrambling to agree trade deals with the United States before Trump's July 9 deadline. But the U.S. leader said Washington will start sending letters to countries on Friday specifying what tariff rates they will face on imports to the United States, a clear shift from earlier pledges to strike scores of individual deals. South Africa's benchmark 2035 government bond was weaker in early deals, as the yield rose 3 basis point to 9.77%.
The Herald
19-06-2025
- Business
- The Herald
Inflation steady as Reserve Bank pushes for lower target
The inflation rate was steady in May, staying below the SA Reserve Bank's 3% to 6% target range as it pushes for the target to be lowered. Headline consumer inflation stood at 2.8% year on year last month, unchanged from April and in line with the median forecast of economists polled by Reuters. SARB, which has cut interest rates at four of its last five policy meetings, stressed its preference for a lower target at its last meeting. The finance minister would need to sign off on changing the inflation target, but discussions are at an advanced stage, governor Lesetja Kganyago said last month. Inflation has been below the midpoint of the target range — the current level the SARB aims for — since August 2024, and the bank believes lowering the target would make the economy more competitive. Analysts agree. 'From the SARB's perspective this will be the ideal time to proceed with the lower inflation target, using current well-behaved inflation to anchor future expectations,' said Razia Khan, chief economist for Africa and the Middle East at Standard Chartered. Danny Greeff, co-head of Africa at ETM Analytics, said a lower target 'could foster structurally lower inflation and interest rates over time, benefiting both the demand and supply sides of the economy'. Annual core inflation, which strips out volatile items like food and energy, came in at 3.0% in May, the same as the previous month and below analysts' expectations. Reuters
Zawya
18-06-2025
- Business
- Zawya
South African inflation steady as central bank pushes for lower target
South Africa's inflation rate was steady in May, staying below the central bank's 3% to 6% target range as it pushes for the target to be lowered. Headline consumer inflation stood at 2.8% year-on-year last month, unchanged from April and in line with the median forecast of economists polled by Reuters. The South African Reserve Bank (SARB), which has cut interest rates at four of its last five policy meetings, stressed its preference for a lower target at its last meeting. The finance minister would need to sign off on changing the inflation target, but discussions are at an advanced stage, Governor Lesetja Kganyago said last month. Inflation has been below the midpoint of the target range - the current level the SARB aims for - since August 2024, and the bank believes lowering the target would make the economy more competitive. Analysts agree. "From the SARB's perspective this will be the ideal time to proceed with the lower inflation target, using current well-behaved inflation to anchor future expectations," said Razia Khan, chief economist for Africa and the Middle East at Standard Chartered. Danny Greeff, co-head of Africa at ETM Analytics, said a lower target "could foster structurally lower inflation and interest rates over time, benefiting both the demand and supply sides of the economy". Annual core inflation, which strips out volatile items like food and energy, came in at 3.0% in May, the same as the previous month and below analysts' expectations.
Zawya
30-05-2025
- Business
- Zawya
South African rand holds gains after SARB focuses on lower inflation target
JOHANNESBURG - The South African rand held most of the previous day's gains in early trade on Friday, after the central bank stressed its strong preference for a lower inflation target at a monetary policy announcement. The South African Reserve Bank (SARB) presented detailed modelling of the impact of a 3% inflation target, compared to the 4.5% level it aims for at the midpoint of its current 3% to 6% target range. The SARB, which resumed interest rate cuts on Thursday after a pause in March, added that its Monetary Policy Committee felt a 3% target was "more attractive" and said it would continue to consider scenarios based on that target at future rate meetings. "Investors focused on the implications of a lower target, namely lower inflation, reduced interest rates, bond market inflows, and stronger long-term growth, which further support the rand," ETM Analytics said. Other factors that point to more rand resilience include a solid trade surplus, tight credit cycle and signs of prudence in government finances, the research firm added in a note. At 0650 GMT, the rand traded at 17.8425 against the dollar , about 0.1% weaker than Thursday's closing level. Weighing against the rand was a stronger dollar on global markets. The benchmark 2035 government bond was stronger in early deals, as the yield fell 4 basis points to 10.13%.
