Rand Review Quarterly Bulletin
We are pleased to present the first Rand Review quarterly bulletin for Q1, 2018. The aim of the quarterly is to highlight significant South African Political & Economic events over the past 3 months and take a look at the Rands performance relative year-to-date,
A Summary:
The Rand increased by 4.5% against the USD over the first quarter of 2018. Largely thanks to a much-needed correction that came as a result of the Ramaphosa presidency.
Performance against similar EM currencies. We decided to compare the performance of the South African Rand against the Mexican Peso & Brazilian Real. As you can see below, the ZAR (+4.51%) outperformed both the MXN (0.22%) and the BRL (-4.24%) over the same period.
Notable Political & Economic events from the Quarter
18 January
Lesetja Kganyago, Governor of the SARB elected as International Monetary & Financial Committee, the policy advisory committee of the IMF.
@KganyagoLesetja – Governor of the South African Reserve Bank – has been selected as new Chairman of the International Monetary & Financial Committee, the policy advisory committee of the IMF. https://t.co/mXXzicmDFZ #IMFAfrica pic.twitter.com/zUxDryPo71
— IMF (@IMFNews) January 18, 2018
31st January
South Africa’s trade balance for Jan’2018 recorded a -R27.7 Billion Deficit. Marks the first trade deficit since Jan’17 and one of the largest monthly deficits ever recorded.
SA TRADE BALANCE DATA RELEASE
Jan’18 reported R27.7B Trade deficit
Deficit largely thanks to a drop in exports#Trade #Rand #ZAR pic.twitter.com/90M7ob1C7m
— RandReview (@RandReview) February 28, 2018
14th February
Jacob Zuma Resigns
Yes
— Has Zuma quit yet? (@HasZumaQuitYet) February 15, 2018
21st February
SA Government announces tax proposals, VAT Increased to 15%, R57 Billion set aside for free tertiary education over the medium term.
Gigaba announces these following tax proposals. #Budget2018 pic.twitter.com/1g5e2IOuth
— Lester Kiewit (@lesterkk) February 21, 2018
26th February
SA Cabinet Reshuffle, Nhlanhla Nene named as South African Finance Minister
Full list of appointments to cabinet: #CabinetReshuffle pic.twitter.com/NTECVeLtrC
— Ranjeni Munusamy (@RanjeniM) February 26, 2018
27th February
Nigeria’s Economy picks up steam, reports 1.9% growth
#Nigeria‘s economic growth rate rose to 1.9% year-on-year in the fourth quarter from 1.4% in Q3. GDP grew 0.8% for 2017 as a whole vs a contraction of 1.6% in 2016. pic.twitter.com/EKOL8pgVpf
— Paul Wallace (@PaulWallace123) February 27, 2018
28th February
Absa PMI & Standard Bank PMI recorded a Manufacturing Sector Expansion for Feb 2018
Both Absa PMI (50.8) & Standard Bank PMI (51.4) recorded a Manufacturing Sector Expansion for Feb 2018
Positive signals for the SA economy. #ZAR #RANDhttps://t.co/Hhsaz8HkDr via @BDliveSA
— RandReview (@RandReview) March 5, 2018
1st March
South African inflation down to lowest since March 2015
#CPI inflation down to 4,0% in February 2018, the lowest rate since March 2015 #StatsSA
For the full report see here: https://t.co/BKChc9T6Os #ZAR #Rand #Inflation pic.twitter.com/H0hNXh7eHV— RandReview (@RandReview) March 20, 2018
6th March
SA GDP growth rate for 2017 announced
#Rand Firms on the back of Favourable GDP data
GDP Growth Rate for Q4,2017
QoQ: 3.1%
YoY: 1.5%Best Quarterly Growth rate since Q2,2016#ZAR up 10c to the USD since the announcement pic.twitter.com/hxYYdMZ5st
— RandReview (@RandReview) March 6, 2018
6th March
SA Annual GDP Growth
SA GDP Growth Quickens for First Time in 4 Years
Annualised Growth Rates pic.twitter.com/eHbSpv0Rrg— RandReview (@RandReview) March 6, 2018
19th March
JSE Quarterly Index Changes
JSE Quarterly Index changes. Effective Monday 19 March 2018. pic.twitter.com/VpvlK0tYjf
— Karin Richards (@Richards_Karin) February 28, 2018
26th March
Moody’s revises South African credit rating outlook
SA dodges third junk rating as Moody’s lifts outlook https://t.co/FoOUNTUw4Z via @Moneyweb
— RandReview (@RandReview) March 26, 2018
28th March
SA Monetary Policy Committee announces Interest rate cut
The MPC has decided to reduce the repurchase rate by 25 basis points to 6.5% with effect from 29 March 2018 pic.twitter.com/NYm5CYkeAu
— SA Reserve Bank (@SAReserveBank) March 28, 2018
The Quarter ended with much-needed relief as the SARB reduced South African interest rates by 25 basis points to 6.5%. This now sets the prime lending rate in South Africa at 10% with the hope that future cuts can stimulate the economy by providing relief to consumers. Overall an impressive performance by the Rand and carry trade investors would have done well with the 4.5% Rand appreciation along with favourable local interest rates.
Follow us on twitter for up to date Rand related news. The Rand Review Quarterly for Q2 will be released in July this year. Let us see if the momentum continues.