This afternoon SA Reserve Bank Governor Lesetja Kganyago will make one of the most anticipated repo rate announcements this year with many economists splitting down the middle whether he will raise the interest rate or hold at 3.5%.
Surging fuel prices will likely influence the Monetary Policy Committee (MPC) decision to hike the repo rate with the AA warning that the petrol price, which hit an all-time high of R19.54 earlier in November, could very well reach R20 a litre in December.
While the inflation rate remained flat at 5% after an announcement from StatsSA on Wednesday, FNB Economist Koketso Mano believes that inflation could rise in November to 5.5% and 4.5% on average for the year.
A survey of 20 Bloomberg economists saw 11 predict an increase while the rest don’t foresee a change.
Bloomberg reports that there is a greater risk of a rate repo rate hike in SA compared to other countries in Africa.
“That’s because the nation’s liquid capital markets make it less insulated than the continent’s frontier economies from plans by developed economies to start reducing stimulus measures. That may force the central bank to lift rates to help keep local assets attractive to offshore investors.”
Annabel Bishop, chief economist at Investec Bank, said, “We’re around the 50% to 60% mark in anticipating whether there will be a hike this week.”
One thing is for sure, ahead of the festive season we’ll have to dig a little deeper into our back pockets and stretch out the purse strings just a little bit further if we are to weather the oncoming storm.
In the markets, the rand is trading a bit stronger at R15.47 against the US dollar ahead of the SARB’s MPC interest rate decision. The unit closed at R15.49 after local CPI came out in line with expectations and retail sales for October surprised on the upside.
President Cyril Ramaphosa announced the four-person shortlist for the vacant chief justice position on the Constitutional Court on Wednesday evening. The list includes Justice Mbuyiseli Madlanga, President of the Supreme Court of Appeal Mandisa Maya, Gauteng Judge President Dunstan Mlambo and Deputy Chief Justice Raymond Zondo.
Here’s a roundup of the world’s top and most interesting headlines:
SA Business
Diversifying Vodacom dips its toes in new markets – Mail & Guardian
Tencent Leads $48 Million Investment in South Africa Startup – Bloomberg
Eskom says it’s not an impossible task to end load shedding – SABC News
Global Business
China’s Embattled Developers Rush to Raise $2 Billion in One Day – Bloomberg
Fisker unveils electric SUVs to beat Tesla over driving range – Reuters
Visa Drags Card Stocks Lower as Amazon to Ban U.K. Purchases – Bloomberg
Markets
Market wrap: JSE flat, rand wobbly ahead of key rates move – SAccess
Gold Down as Investors Focus on Central Bank Monetary Policies – Investing.com
Dollar takes breather from rally, hovers just off 16-month top – SABC News
Opinion/In-depth
High court ruling involving Zuma’s taxes may alter the ways of South Africa’s democracy – Daily Maverick
Jean Pierre Verster on Christo Wiese’s unpopularity among Shoprite shareholders – BizNews
Blooming impunity: Update on PPE irregular expenditure and graft – Daily Maverick
Video
Watch: Africa’s investment case – Business Day TV
Volkswagen powers up grid to take on Tesla – Reuters Video
Twitter CFO: Buying Crypto Assets ‘Doesn’t Make Sense Right Now’ – CoinDesk
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