Latest news with #R17.83
The Star
09-06-2025
- Business
- The Star
Despite 0. 1% growth in Q1, the rand held firm below R18 to the dollar
Nicola Mawson | Published 4 days ago As of lunchtime on Wednesday, it was trading at R17.83, remaining range bound in the tight R17.75 to R18.05 bracket, Andre Cilliers, Currency Strategist at TreasuryONE indicated. Bianca Botes, director at Citadel Global, noted earlier on Wednesday morning that the currency was at R17.85. Image: Pixabay Despite South Africa's economy growing at a measly 0.1% in the first quarter of this year, the local currency was unmoved and continues to trade at levels below R18 to the dollar. As of lunchtime on Wednesday, it was trading at R17.83, remaining range bound in the tight R17.75 to R18.05 bracket, Andre Cilliers, Currency Strategist at TreasuryONE indicated. Bianca Botes, director at Citadel Global, noted earlier on Wednesday morning that the currency was at R17.85. Cilliers said the dismal gross domestic product (GDP) data hasn't dented the local currency, with it taking its lead from a weaker dollar instead. Overall, Tuesday's print of GDP data was better than expected by several economists, most of which noted that this was due to the agricultural sector performing well. Nolan Wapenaar, co-chief investment officer at Anchor Capital, explained that much of the production data and economic data that had already been had been pointing to a poor GDP print. 'In some ways, agriculture saved the day for the GDP numbers,' he said. Maarten Ackerman, chief economist and advisory partner at Citadel, said that the 'latest GDP figure paints a familiar picture: a few resilient sectors keeping the economy afloat, while structural underperformance holds us back. Without meaningful and coordinated reform, the economy will continue to limp along, unable to meaningfully reduce unemployment or address pressing social challenges.' Wapenaar added that the rand was not really impacted by numbers that were as expected. Earlier this week, Investec chief economist, Annabel Bishop, noted that the rand 'is not expected to strengthen to its fair value of close to R16 until the fundamentals for economic growth improve in South Africa'. The rand had been benefitting from a weaker dollar, which Bishop had previously said was a deliberate trade tactic by US President Donald Trump. His vacillatory position on tariffs has led to several knee-jerk market reactions. Trump's latest move – which follows trade negations including with President Cyril Ramaphosa – was to double the tariffs on steel and aluminium from 25% to 50%. In a statement on the White House website, he said he was doing this 'so that such imports will not threaten to impair the national security'. Wapenaar said the rand's relative strength was 'also a case of the markets being rather preoccupied with the White House' and what is happening there, which means that other data prints are less impactful than they might otherwise be'. IOL
IOL News
04-06-2025
- Business
- IOL News
Despite 0. 1% growth in Q1, the rand held firm below R18 to the dollar
As of lunchtime on Wednesday, it was trading at R17.83, remaining range bound in the tight R17.75 to R18.05 bracket, Andre Cilliers, Currency Strategist at TreasuryONE indicated. Bianca Botes, director at Citadel Global, noted earlier on Wednesday morning that the currency was at R17.85. Image: Pixabay Despite South Africa's economy growing at a measly 0.1% in the first quarter of this year, the local currency was unmoved and continues to trade at levels below R18 to the dollar. As of lunchtime on Wednesday, it was trading at R17.83, remaining range bound in the tight R17.75 to R18.05 bracket, Andre Cilliers, Currency Strategist at TreasuryONE indicated. Bianca Botes, director at Citadel Global, noted earlier on Wednesday morning that the currency was at R17.85. Cilliers said the dismal gross domestic product (GDP) data hasn't dented the local currency, with it taking its lead from a weaker dollar instead. Overall, Tuesday's print of GDP data was better than expected by several economists, most of which noted that this was due to the agricultural sector performing well. Nolan Wapenaar, co-chief investment officer at Anchor Capital, explained that much of the production data and economic data that had already been had been pointing to a poor GDP print. 'In some ways, agriculture saved the day for the GDP numbers,' he said. Maarten Ackerman, chief economist and advisory partner at Citadel, said that the 'latest GDP figure paints a familiar picture: a few resilient sectors keeping the economy afloat, while structural underperformance holds us back. Without meaningful and coordinated reform, the economy will continue to limp along, unable to meaningfully reduce unemployment or address pressing social challenges.' Wapenaar added that the rand was not really impacted by numbers that were as expected. Earlier this week, Investec chief economist, Annabel Bishop, noted that the rand 'is not expected to strengthen to its fair value of close to R16 until the fundamentals for economic growth improve in South Africa'. The rand had been benefitting from a weaker dollar, which Bishop had previously said was a deliberate trade tactic by US President Donald Trump. His vacillatory position on tariffs has led to several knee-jerk market reactions. Trump's latest move – which follows trade negations including with President Cyril Ramaphosa – was to double the tariffs on steel and aluminium from 25% to 50%. In a statement on the White House website, he said he was doing this 'so that such imports will not threaten to impair the national security'. Wapenaar said the rand's relative strength was 'also a case of the markets being rather preoccupied with the White House' and what is happening there, which means that other data prints are less impactful than they might otherwise be'. IOL
The Citizen
30-05-2025
- Business
- The Citizen
Weekly economic wrap: Rand strongest since December, but falling again
Although the rand kept its head up all week and strengthened even more on the back of the repo rate cut, it lost traction on Friday afternoon. The biggest economic news of the week was the mostly unexpected cut in the repo rate of 25 basis points, while the rand kept its momentum and reached its strongest level since December. Gold, on the other hand, was not so lucky. Lisette IJssel de Schepper, chief economist at the Bureau for Economic Research, says the Monetary Policy Committee (MPC) of the South African Reserve Bank (Sarb) decided to cut the repo rate by 25 basis points to 7.25%, which means that the prime interest rate is now 10.75%. 'The dovish tilt, with all six members voting for a cut and one member even preferring a 50 basis points cut, was surprising, but welcome. In addition, the clear signalling around moving to a 3% inflation target is positive and removes uncertainty.' Bianca Botes, director at Citadel Global, points out that the rand strengthened to its best level since December, helped by a weaker dollar and the Sarb's repo rate cut, which aims to support the local economy and as inflation remains low. Busisiwe Nkonki and Isaac Matshego, economists at the Nedbank Group Economic Unit, also point out that the rand gained further ground this week. 'The Sarb's interest rate cut and the announcement of the imminent lowering of the inflation target boosted sentiment, lifting the local unit to R17.80/$ late Thursday, and on Friday morning it was trading around R17.83/$.' Unfortunately, the good news did not last, and the rand traded at R18.04 on Friday afternoon. ALSO READ: Reserve Bank cuts repo rate thanks to lower inflation, stronger rand Decrease in prices of oil and gold Oil prices dropped for the second week in a row, with Brent Crude trading near $63/barrel, Botes says. 'This decline is driven by investors remaining uncertain about what will happen with US tariffs, as the legal back-and-forth is making the market more unpredictable. 'Traders are also watching the upcoming expanded Organization of the Petroleum Exporting Countries (OPEC+) meeting, where major oil-producing countries are expected to agree on increasing oil production in July.' Botes says there is extra tension because Kazakhstan is producing more oil than it is supposed to, which could lead to even more supply than planned. On the demand side, recent US economic data shows the economy shrank slightly in the first quarter, raising worries that people and businesses might use less fuel.' She says gold prices also slipped to around $3,290/ounce and are heading for a weekly loss, as investors wait for the PCE index, which could affect future interest rate decisions. Investors also remain cautious as they wait for more clarity on US inflation and interest rates. ALSO READ: Producer Price Index remains unchanged, but an increase is coming Producer price inflation remains muted Lebohang Namo, economist at the BER, says producer price inflation (PPI) for final manufactured goods, remained unchanged at 0.5% in April. 'Like consumer inflation last week, this was above consensus expectations following a string of downward surprises.' Mamello Matikinca-Ngwenya, Siphamandla Mkhwanazi, Thanda Sithole and Koketso Mano, economists at FNB, say continued deflation in fuel, paper products and transport equipment helped keep overall producer inflation contained in April. Nkonki and Matshego, economists at the Nedbank Group Economic Unit, say April's producer price inflation provided more evidence of subdued price pressures. Producer inflation held steady at 0.5%, matching our forecast and exceeding market expectations of 0%. 'Deepening fuel price deflation offset higher food prices. Elsewhere, price pressures remained relatively subdued. Food, beverages and tobacco inflation accelerated from 4.1% to 4.7%, while deflation in coke, petroleum, chemicals, rubber, and plastics deepened from 4.1% to 5.5%. Producer inflation will likely rise moderately off a low base in the months ahead.' ALSO READ: Salaries decreased by 2% in April, but higher than a year ago Private sector credit extension increased in April Matikinca-Ngwenya, Mkhwanazi, Sithole and Mano say Private Sector Credit Extension (PSCE) growth increased to 4.6% in April, up from 3.4% in March, largely driven by an acceleration in corporate credit growth, which increased to 6.0% from 3.9%. Household credit growth was 3.0%, marginally higher than the 2.9% recorded in March. Within corporate credit, growth in general loans and advances rose to 7.4% from 4.3%, overdraft growth climbed to 12.6% from 10.3%, and mortgage advances grew by 6.2%, slightly up from 6.1% in the previous month. Instalment sales credit growth remained stable and above inflation at 5.0%, compared to 5.1% in prior months, while credit card growth declined sharply to 0.6% from 2.5%. In the household segment, general loans and advances and overdrafts remained in contractionary territory, while mortgage advance growth was stable at 2.3%, unchanged from the prior month. Growth in other household credit categories remained above inflation, with instalment sales credit at 6.2% and credit cards at 8.5%. Nkonki and Matshego say the growth in broad money supply improved slightly from 5.8% in March to 6.1% in April, exceeding their expectations of 5.9%. 'The boost in PSCE came from faster growth in loans and advances and a less severe decline in bills and investments. 'The most significant momentum came from companies, where advances jumped from 5.5% to 7.5%, amplified by last year's low base. Even so, company overdrafts and general loans accelerated, while commercial mortgages and instalment sales and leasing finances held relatively steady.' They also note that the slow recovery in household loans continued, rising slightly from 2.9% to 3%. 'The uptick came mainly from a rebound in credit card usage, while vehicle finance and home loans were unchanged. We expect the recovery in credit demand to gain moderate upward traction in the months ahead, supported by easier financial conditions and firmer domestic demand.'
