Latest news with #ETMAnalytics
The Herald
2 days ago
- 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
3 days ago
- 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%.
Reuters
30-05-2025
- Business
- Reuters
South African rand holds gains after SARB focuses on lower inflation target
JOHANNESBURG, May 30 (Reuters) - 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%.
Reuters
17-04-2025
- Business
- Reuters
South African rand weaker as markets await tariff, local government news
JOHANNESBURG, April 17 (Reuters) - South Africa's rand weakened early on Thursday against a firmer dollar, as markets awaited information on U.S. tariffs and local investors looked for news on the future of the coalition government. At 0635 GMT, the rand traded at 18.8550 against the U.S. dollar , about 0.2% weaker than its previous close. The dollar last traded about 0.3% stronger against a basket of currencies. "Ahead of the Easter long weekend, investors will be reluctant to take on any significant market position. There are so many daily changes that doing so would be risky," ETM Analytics said in a research note. U.S. President Donald Trump met with Japanese officials on Wednesday, in one of the first rounds of face-to-face talks since his tariffs on most countries roiled markets and stoked recession fears. Markets were also processing comments from Federal Reserve Chair Jerome Powell, who warned of the risk of slowing growth and rising prices due to tariffs. Like other risk-sensitive currencies, the rand takes direction from global drivers such as U.S. economic policy in addition to domestic factors. Local investors will eye developments around a budget stand-off between the two biggest parties in the coalition government, the African National Congress (ANC) and the Democratic Alliance (DA), over a proposed value-added tax (VAT) hike on May 1. The pro-business DA voted against the budget's fiscal framework in parliament and is challenging the VAT hike in court, raising concerns among investors over the stability of the coalition government. "All of (South Africa's) domestic political developments are not taking place in isolation. On the contrary, if left unresolved, they may compound an already uncertain international environment," ETM Analytics said. "The ZAR is therefore expected to trade cautiously with one eye on local developments and the other on the performance of the USD." South Africa's benchmark 2030 government bond was firmer in early deals, with the yield down 2 basis points to 9.16%.
