While you were asleep: To raise or not to raise interest rates

As stock markets are still feeling the brunt from the Federal Reserve’s hawkish tone on interest rates, an expected rise in inflation of 5.2% in May in South Africa this week could signal a local increase in interest rates sooner rather than later. This may be good news for the rand, at least in the short term.

The rand has been the hardest hit emerging-market currency last week and is still on the back foot, this morning trading at R14.40 to the greenback.

Bloomberg reports emerging-market currencies hit by a hawkish Fed may soon regain their record run against the dollar on expectations that developing central banks may outpace their US counterpart in policy tightening.

It expects South Africa to tighten policy as economic activity and inflation pick up from a pandemic-driven slump. In comparison, the Fed has signalled it’s likely to lift interest rates only in 2023. But the selloff in US stocks on Friday is telling a different story.

Here’s a roundup of the world’s top and most interesting headlines:

SA Business
SA ‘diamond rush’ unearths only quartz crystals – Reuters
The cheapest bank account is South Africa in 2021 – withdrawals vs deposits vs monthly fees – Business Tech
Emerging-market bulls pin currency hopes on hawks outpacing Fed – Bloomberg

Gold up, boosted by US treasury yields retreat – Investing.com
Bitcoin drops amid mining crackdown – MyBroadband
Asian stocks down, impact of surprise hawkish Fed policy decision continues – Investing.com

Here’s how to fix South Africa’s youth unemployment and black economic empowerment in one go – Daily Maverick
A day in the life of a Twitter exec – Business Insider
Imagine no load shedding, it’s easy if you try – Daily Maverick

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