Nonetheless, prices for many commodities have fallen as a result of weaker demand globally. The South African rand depreciated by 22% between February and the end of April. The impacts will be particularly severe for small businesses, and individuals with earnings in the informal sector. Global producer price inflation has decelerated. Current estimates from the IMF show global growth contracting this year by about 2.9%.Economic contractions are expected to be deepest in the second quarter of 2020, with some recovery expected in the third quarter of the year. October 15, 2020. SARB’s new deputy governors The bank's fresh forecast is slightly more optimistic than the 8.2% contraction in gross domestic product the bank … Inflation has moderated since the beginning of the year. Copyright 2020 Government of South Africa. Opening address by Mr Lesetja Kganyago, Governor of the South African Reserve Bank, at the fourth Annual Distributed Sovereign Debt Research and Management Conference University of Pretoria, Pretoria, 7 September 2020. There are good reasons to have some prudential restrictions on capital leaving the country, especially savings in retirement funds and the reserves of insurance companies, Mr Kuben Naidoo, South African Reserve Bank (SARB) deputy governor and chief executive of the Prudential Authority, has said. First, we put in place Intraday Overnight Supplementary Repurchase Operations (IOSROs) aimed at providing liquidity support to commercial banks. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. The South African Reserve Bank has a responsibility to maintain price stability and look after the economy. The decline in global GDP has been compounded by increased risk aversion and extreme volatility in financial asset prices, with sharp and deep market sell- offs. At the same time, the borrowing rate on the Standing Facility, which is the rate at which the SARB absorbs liquidity, was also adjusted lower. Since the March meeting of the Monetary Policy Committee (MPC), the Covid-19 pandemic has spread globally and its impact is being felt through all economies. Four repo rate cuts have been made since March 2020, as follows: a 100 basis points cut at a special MPC meeting in April 2020; Domestic money market liquidity management. Business and consumer confidence has also fallen as uncertainty levels reached new highs. Fiscal authorities have contributed by delivering stimulus packages that are estimated to be larger than the response to the global financial crisis of 2008 and 2009. The SARB has a statutory mandate to protect and enhance financial stability in South Africa by monitoring global and domestic conditions, using various indicators to identify the risks and vulnerabilities which may impact on the financial system. The SARB has indicated its willingness to offer longer-term repo facilities of up to 12 months, subject to liquidity conditions in the market. Lesetja Kganyago was reappointed as the Governor of the South African Reserve Bank (SARB) for a second term in November 2019; his first was effective from 9 November 2014. Although many of these moves have been reversed, on balance, capital inflows remain below those of our emerging market peers. The SARB initiated a process in January to monitor the effects of the pandemic on its operations, including the operations of its subsidiaries. The SARB was only the fourth central bank established outside the United Kingdom and Europe, the others being the United States, Japan and Java. Lesetja Kganyago, governor of South Africa's central bank, speaks during a news conference following a Monetary Policy Committee meeting in Pretoria, South Africa… The central bank kept the repo rate at … SOUTH AFRICAN RESERVE . The overall risks to the inflation outlook at this time appear to be to the downside. South African Reserve Bank Governor Lesetja Kganyago listens during an interview in New York City, in New York, US, on November 9, 2017. More than R30 billion worth of government bonds has been bought since the commencement of the programme in March this year. The last time a figure of this magnitude appeared in our data was in 1931, during the Great Depression, when output fell by 6.2%. To address comments or complaints, please Contact us. This takes the total cut in 2020 … South African Reserve Bank governor Lesetja Kganyago in Cape Town, South Africa, on Aug. 1. Households may continue to maintain high precautionary savings, and uncertainty is likely to weigh on business capital spending plans. Governor of the South African Reserve Bank Lesetja Kganyago is suing Nelson Mandela Bay ANC councillor Andile Lungisa for defamation of character. Two new deputy governors begin their tenures with the South African Reserve Bank today and bring a wealth of experience from both inside and outside of civil service. Monetary policy can ease financial conditions and improve the resilience of households and firms to the economic implications of Covid-19. By submitting above, you agree to our privacy policy. Thank you for inviting me here today to speak about the South African economy. In line with a partial global recovery, we expect economic activity in South Africa to start recovering as lockdown measures are gradually eased. We mark the 100th annual Ordinary General Meeting (AGM) of the South African Reserve Bank (SARB) at a time when the world is facing one of the most disruptive and challenging crises in recent memory. SA Reserve Bank has scope for another interest rate cut this week By Ed Stoddard • 16 November 2020 Lesetja Kganyago, governor of the South African Reserve Bank. Despite this rise in country risk, the Committee notes that the more prolonged lockdown and slower recovery creates downside risk to inflation and allows further space for monetary policy to respond to the virus-induced demand shock to the economy. He assumed the Governorship of the South African Reserve Bank on 9 November 2014, following the expiry of the term … International food prices have eased and local food price inflation is expected to remain low, in part due to higher domestic production levels. Lastly, as an extra measure to add liquidity and promote the functioning of the bond market, the SARB commenced with a programme of purchasing government securities in the secondary market. Tshazibana said despite the fiscal and monetar South African Reserve Bank Governor Lesetja Kganyago listens during an interview in New York City, in New York, US, on November 9, 2017. The rand has depreciated by 22.6% against the USD since January and by 17.3% since the March meeting of the MPC. Government of South Africa (Pretoria) press release. THE president of Zambia, Edgar Lungu, on Saturday dismissed Bank of Zambia governor Denny Kalyalya without giving a reason for the surprise move. South African has gained renewed optimism among investors, reserve bank governor Lesetja Kganyago told CNBC Wednesday; South Africa has … The South African Reserve Bank’s Monetary Policy Committee has voted to cut the country’s rates by a further 25 basis points. Lesetja Kganyago was reappointed as the Governor of the South African Reserve Bank (SARB) for a second term in November 2019; his first was effective from 9 November 2014. He holds a MSc in Economics from SOAS London University and a BCom degree in Economics and Accounting from UNISA. He is the Governor of the South African Reserve Bank (SARB). While second-quarter GDP data are not yet available, there is sufficient evidence to confirm that the lockdown has exerted a drag on economic activity. Fundi Tshazibana. Police Units Raid Offices of South African Lottery Commission, South African Court Sets Aside Revenue Service's 'Rogue' Report. The COVID-19 pandemic has placed all of these risks at the centre of the financial system. Philosophy; Banker and Advisor to Government; Management of the South African money and banking system; Risk Management. This has enabled the Prudential Authority (PA) to deliver temporary regulatory relief for banks in a manner that is consistent with internationally agreed regulatory standards. Weaker domestic growth and greater fiscal risks have resulted in a downgrade by Moody’s credit rating agency and confirmation of a negative outlook by Fitch, a weaker currency and higher borrowing costs for government, banks and firms. There are tough choices for us to make as a society. Governor of the South African Reserve Bank, at the fourth Annual Distributed Sovereign Debt Research and Management Conference University of Pretoria, Pretoria 7 September 2020 Good afternoon, ladies and gentlemen. The relaxation of certain regulatory measures has enabled banks to provide support to households and businesses through continued lending activities, alongside the government loan guarantee scheme. Inflation expectations for 2020 are at around 3.9%, the lowest in recorded history. Previous Governors; Legislation; Mandate; Functions. Regulatory and supervisory relief measures. The MPC has reduced the repo rate by a cumulative 275 basis points, to 3.50% per annum. A Joint Operational Committee (JOC) was established in February to lead the SARB's response and ensure business continuity. “Lower longer-term inflation outcomes are … After all, everything we do is through our people. The Covid-19 outbreak will have a major health and social impact, and forecasting domestic economic activity presents unprecedented uncertainty. While there is limited information to assess the impact of interest rate adjustments and other regulatory measures, the decline in indicators of bond market frictions and the improvements in money market liquidity conditions testify to the positive impact of the SARB's liquidity management measures. The COVID-19 outbreak is having major health, social and economic impacts, which presents challenges in forecasting. Electricity pricing remains a concern but has moderated somewhat. It was established in 1921 after Parliament passed an act, the "Currency and Bank Act of 10 August 1920", as a direct result of the abnormal monetary and financial conditions which World War I had brought. Uganda: Kampala-Entebbe Expressway, World's Most Expensive Road? Motion Against South Africa's Ramaphosa a Looming 'Iceberg'? The faster the global economy recovers from the crisis, as China appears to be gradually doing now, the more positive growth spillovers will strengthen for South Africa, including healthy price levels for commodity exports. Such steps will further reduce existing constraints on monetary policy and its transmission to lending. South Africa’s central bank said on Wednesday the coronavirus had resulted in far reaching risks to financial stability and banks’ profitability would suffer, but lenders were in a good … SA Reserve Bank sees 50% third-quarter GDP rebound, holds interest rates steady By Ed Stoddard • 19 November 2020 Governor of the South African Reserve Bank Lesetja Kganyago. THE GOVERNOR OF THE . The World Bank highlights that this will be the deepest global contraction since 1945, with a record 93% of the world's economies expected to experience economic contraction this year. The South African economy is likely to recover to pre-crisis levels at the end of 2021 or 2022, said the deputy governor of the South African Reserve Bank (SARB) Fundi Tshazibana on Wednesday while speaking at the Absa Annual Fixed Income Conference. This will likely also increase job losses, with further consequences for aggregate demand. MPC Statement 19 November 2020 Page 1 PRESS STATEMENT EMBARGO DELIVERY 19 November 2020 STATEMENT OF THE MONETARY POLICY COMMITTEE Issued by Lesetja Kanyago, Governor of the South African Reserve Bank This was due to falling export demand, weak business confidence and investment, and the return of load-shedding. The unprecedented restrictions imposed by countries to try and contain the spread of the virus have contributed to plunging economic activity, ending the global economic expansion that had started in 2010. Kristalina Georgieva. As we navigate through this COVID-19 storm, the SARB will continue to deploy its tools, as appropriate, in accordance with its mandate, to provide support to the South African economy. This decline accelerated to an annualised rate of 2.0% in the first quarter of 2020, despite the nation-wide lockdown only coming into effect in the last few days of March. Please try again later. It's Mr Music vs Zama in Idols South Africa Finale! By Suren Naidoo 19 Nov 2020 15:10 Lesetja Kganyago, governor of the South African Reserve Bank. GDP is expected to grow by 2.2% in 2021 and by 2.7% in 2022. To place our economy on a sound and sustainable growth path, the SARB stands ready to provide support to the economy within its mandate. The decision was unanimous. Government's debt issuance is higher; the deteriorating economic conditions have increased the credit risks faced by financial institutions; periods of market stress and volatility have placed a higher strain on market infrastructures. The South African Reserve Bank's actions during the COVID-19 crisis. That’s because it happened in quick succession and the … Coupled with prudent macroeconomic policies and structural reforms, a lower cost of capital can support growth in long-term investment. Policy; Governance Structure; Framework; Risk Management and Compliance Department; Processes; Approach And Methodology ; Whistle-blowing@SARB; Reserve Bank Shares. At this stage, the sustainability of that recovery remains uncertain, and global markets remain in risk-off mode. 14 Apr 2020 Statement of the Monetary Policy Committee - Issued by Lesetja Kganyago, Governor of the South African Reserve Bank Since the March meeting of the Monetary Policy Committee (MPC), the Covid-19 pandemic has spread globally and its impact is being felt through all economies. South African Ombud Denied Appeal on Dismissal Motion, Covid-19 Certificate Required for South Africa, Zimbabwe Travel, Inflated Deals A Debt Trap for Lesotho's Future Generations, HIV Prevention Injection Hailed As a Major Breakthrough for Women, UN Urges 'Shared Responsibility' on HIV/Aids, Covid-19 Pandemics, Joy For Cross-Border Traders As Zimbabwe Reopens Beitbridge. These should be addressed by implementing prudent macroeconomic policies and structural reforms that lower costs generally, and increase investment opportunities, potential growth and job creation. The timing and size of these contradictory impulses suggests that they are not perfectly offsetting, with weaker inflation in the near term likely giving way to higher inflation later in the forecast period. Governor Kganyago has more than 20 years of experience in formulating and implementing public policy, having spent this time at the central bank and at the National Treasury. Neutral citation: The South African History Archive Trust v The South African Reserve Bank and Another (Case no 17/19) [2020] ZASCA 56 (29 May 2020) Barring severe and persistent currency and oil shocks, inflation is expected to be well contained, remaining below the midpoint of the target in 2020 and close to the midpoint in 2021. Third, the end-of-day lending rate on the Standing Facility was reduced from repo plus 100 basis points to the repo rate. Migrants Targeted Over Roles in South African Informal Sector? Over the same period, the yield on the 10- year government bond rose by more than 200 basis points, and money market liquidity was thin. Consequently, the SARB's inflation forecast now sees core inflation remaining within the lower half of the target range for the remainder of the forecast period, vthat is until the end of 2022. Expectations of future inflation broadly remain around the mid-point of the band, although market-based expectations have recently ticked up in response to the depreciation of the currency. In addition to continued easing of interest rates, the Bank has taken steps to ensure adequate liquidity in money and government bond markets and to ease capital requirements to free capital for onlending by financial institutions. Our projections for 2021 and 2022 are for GDP to recover to 3.7% and 2.8% respectively. The PA has provided guidance covering accounting matters and imposed a limit to the payment of dividends and bonuses by banks and insurers to ensure the conservation of capital and retained capacity in an environment of heightened uncertainty caused by COVID-19. Lesetja Kganyago was appointed Governor of the South African Reserve Bank (SARB) with effect from 9 November 2014. An address by Lesetja Kganyago, Governor of the South African Reserve Bank (SARB), at the 100th annual Ordinary General Meeting of the SARB shareholders, South African Reserve Bank, Pretoria. The COVID-19 pandemic has demonstrated the extent of interconnectedness of the global economy through production value chains, trade, financial markets, travel, and the exchange of knowledge. The slight drop in inflation may provide room for the South African Reserve Bank to reduce rates further in November. South African Reserve Bank Governor Lesetja Kganyago announced ... "Headline CPI inflation is expected to peak at 5.4% in the first quarter of 2020 and settle at … The South African Reserve Bank has a responsibility to maintain price stability and look after the economy. Within the central banking community, the actions of major global central banks have provided space for the SARB to respond to our unique domestic conditions. 4% in 2022. This has implications for emerging markets and South Africa in particular, as investor appetite for rand-denominated equities and bonds is expected to remain weak. The South African Reserve Bank (SARB) has cut the repo rate by 25 basis points. Previous Governors; Legislation; Mandate; Functions. I would like to thank the International Development Law Unit at the Centre for Human Immediately prior to her appointment to that position, she served as an adviser to the Governor of the bank, since 10 February 2018. For our forecast, the Brent crude oil price is expected to average $42 per barrel in 2020 and $45 per barrel in 2021, very close to the March forecast. The SARB's key operations have not been affected by the remote working arrangements. Consumer price inflation fell to as low as 2.1% year on year in May, down from 4.6% three months earlier. In a webinar hosted by the Cape Town Press Club, the governor addressed the audience in an animated fashion, comparing the … This measure is meant to discourage banks from depositing money at the SARB, and to encourage money market liquidity. The Bank’ s headline consumer price inflation forecast averages 3.6% for 2020,  4.5% for 2021, and 4. Slightly lower oil prices and sharply lower domestic growth pulls down on the inflation forecast, while negative global sentiment and fiscal risks have led to equally aggressive currency depreciation and upside pressure on inflation. South Africa’s risk profile has increased. JOHANNESBURG--The South African Reserve Bank on Thursday kept its main repo rate at 3.5%, even as it forecast that Africa's most developed economy will shrink 8% this year. Nigerian President Appoints New Civil Defence Boss. Minister Pravin Gordhan Signs Eskom Social Compact With Social Partners, KwaZulu-Natal On Possible Closure of Beaches During Festive Season, KwaZulu-Natal Health Urges Residents to Adhere to Covid-19 Regulations, Minister Zweli Mkhize Confirms 4 011 More Cases of Coronavirus Covid-19, Premier Alan Winde On Coronavirus Covid-19 Cases for 8 December. Reserve Bank Governor, Lesetja Kganyago will announce the Monetary Policy Committee's decision. AllAfrica publishes around 900 reports a day from more than 130 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. Lesetja Kganyago: The South African Reserve Bank, the coronavirus shock, and "the age of magic money" Lecture by Mr Lesetja Kganyago , Governor of the South African Reserve Bank, at the Wits School of Governance, Johannesburg, 18 June 2020. Interest rate decisions are expected to play an important role in replacing displaced income. The implied path of policy rates over the forecast period generated by the Quarterly Projection Model indicates five repo rate cuts of 25 basis points extending into the first quarter of 2021. In its latest update on the World Economic Outlook, the International Monetary Fund (IMF) estimates that global gross domestic product (GDP) will contract by about 4.9% in 2020. While major economies in Asia and Europe appear to be on the road to recovery, the United States (US) and most of the emerging world are still very much in the midst of the crisis. In addition, the prolonged period of remote working has increased cybersecurity risks. There was a problem processing your submission. South Africa’s central bank held its benchmark interest rate for a second straight meeting and signaled increases next year, even as its forecasts … South Africa’s lockdown has been extended by an additional 14 days, bringing the total lockdown period to 35 days. Get the latest in African news delivered straight to your inbox. Philosophy; Banker and Advisor to Government; Management of the South African money and banking system; Risk Management. As usual, the repo rate projection from the QPM remains a broad policy guide which can change from meeting to meeting in response to changing data and risks. While the focus has been on monetary policy, coupled with regulatory and liquidity management measures, it has been essential for the SARB to ensure that key functions in the economy are not negatively affected by any disruptions to the national payment system and our currency operations. Chairman. As a consequence, the high-frequency indicators suggest that the gradual lifting of lockdown restrictions in the major economies (first China, then Europe) has seen a rebound in manufacturing production and retail spending. A House Divided - South African Ruling Party Facing Major Split? The recovery of the South African economy requires a multi-pronged policy approach. Many countries - especially in Africa, Latin America and South Asia - are still experiencing increases in new COVID-19 infections. Governor, South African Reserve Bank. Lesetja Kganyago was born in Johannesburg, South Africa in 1965. We have also seen the value in being part of a global community through the contributions that we were able to make through our advocacy in global forums, strengthening the global financial safety net. South African Reserve Bank stands ready to provide support to the economy within its mandate,” Kganyago said. Image: Reuters. 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