May 18, 2024

  • Bitcoin(BTC)$24,383.00-1.66%
  • Ethereum(ETH)$1,657.83-2.53%
  • Tether(USDT)$1.000.18%
  • BNB(BNB)$310.23-1.26%
  • USD Coin(USDC)$1.000.10%
  • XRP(XRP)$0.39-0.81%
  • Binance USD(BUSD)$1.000.05%
  • Cardano(ADA)$0.39-2.73%
  • Dogecoin(DOGE)$0.09-2.67%
  • Polygon(MATIC)$1.38-6.66%

South Africa Central Bank Stand Still on Rand Defence

0 58

CEM REPORT, FINANCE | Despite falling 13 per cent this year against the dollar, South Africa’s central bank Governor Lesetja Kganyago has said the institution will not move to defend the rand.

Kganyago said the bank’s main concern remained fighting inflation, reiterating that risks to the inflation outlook included food prices, oil prices and exchange-rate moves.

According to Reuters, Kganyago told a webinar that the bank was only concerned about the currency to the extent that it fed into inflation and would not take any measures to defend it.


South Africa’s consumer inflation moved up marginally to 4.8 per cent year-on-year in August from 4.7 per cent recorded in July, however, it remains comfortably within the central bank’s target range of between 3%-6%.

After its last meeting in September, the South African Reserve Bank (SARB) kept its main lending rate unchanged at 8.25 per cent. Kganyago has been reluctant to suggest that rates may soon start to fall.

“I wouldn’t say inflation is going to be volatile, but it may remain higher for longer than we think,” said Kganyago.

South Africa’s benchmark 2030 government bond was stronger in early deals, with the yield down 3 basis points to 11.055%.

[READ ALSO] United Arab and Egypt Agree to Currency Swap Deal

Inversely, the Nigerian Central Bank has continued to defend the naira but the move seems to yield the reverse as the naira is trading at ₦1000/$ at the parallel market as of the time of this report. While the unification of the exchange windows can be attributed to the high exchange rate, analysis believes certain policies are required to be put in place to strengthen the market.

Inflation however has continued to grow from 24.08 per cent in July to 25.80 per cent in August according to the Nigeria Bureau of Statistics. Food inflation also rose by 0.41 per cent to reach 3.87 per cent from 3.45 per cent.

Worth noting is the Central Bank of Nigeria has created several agriculture invention programmes, yet food prices continue to increase. Farmers and retailers have attributed the continuous rise in food prices to the steady rise of the dollar.

Share this

Leave a Comment

glo advert
WP Twitter Auto Publish Powered By :