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<p>The South African Reserve Bank has done a considerable amount of heavy lifting. This year alone, the repo rate was cut by 300 basis points. For many, it is no surprise that the bank decided to keep the rate unchanged, in its latest MPC meeting. In addition, the Reserve Bank has changed its forecast for GDP contraction in 2020, to 8.2 per cent. Investec Chief Economist, Annabel Bishop joins CNBC Africa for more.</p>


SARB forecasts GDP contraction of 8.2% in 2020

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<p>Emerging market currencies are extremely volatile, as world markets struggle with growth and recovery. The Rand has been at a tipping point amid Covid-19, driven by global sentiment and now most recently domestic issues. Joining CNBC Africa to unpack risk appetite for emerging markets currencies is Charles Robertson, Global Chief Economist at Renaissance Capital.</p>


What’s behind the rand’s volatile movements?

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<p>BNP Paribas South Africa expects that the velocity of money and its relationship to inflation in the South Africa economy should play an important role in guiding future monetary policy decisions. Joining CNBC Africa for more is Jeff Schultz, Senior Economist at BNP Paribas South Africa.</p>


BNP Paribas on SA’s monetary response to the COVID-19 economic crisis

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<p>Economists are divided in their expectations of the MPC rate decision taking place today. Some are suggesting a rate hold as it’s close to the bottom of the cycle, and others expecting a 25 basis point cut which would make it the lowest interest rate point in decades. PwC expects no change in the rates this afternoon and joining CNBC Africa for more is Christie Viljoen, Economist at PwC.</p>


PwC expects a hold on MPC rates today

PwC expects a hold on MPC rates today, here’s why

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<p>Ahead of the conclusion of this week’s Monetary Policy Meeting, Absa has predicted that the South African Reserve Bank will cut the repo rate by 50 basis points. Joining CNBC Africa to unpack these predictions is Peter Worthington, a Senior Economist at Absa Group.</p>


Another rate cut on the cards tomorrow

Another rate cut on the cards tomorrow, says Absa’s Peter Worthington

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<p>Economists are divided in their expectations of tomorrow’s MPC decision, with some suggesting a rate hold as it’s close to the bottom of the cycle, and others expecting a 25 basis point cut which would make it the lowest interest rate point in decades. Sanisha Packirisamy, Economist at Momentum Investments joins CNBC Africa for more.</p>


Economists divided over SARB’s rate decision

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<p>Next week expects a crucial budget that could decide the trajectory of the post Covid-19 economy. Finance Minister Tito Mboweni will deliver his emergency budget on Wednesday the 24th.  Meanwhile there’s a budget issue. The South African Reserve Bank is to resist the call from government to finance it growing budget deficit with aggressive quantitative easing.  According to Governor Lesetja Kganyago it could add even more strain on the National Treasury and the large-scale quantitative easing could bankrupt the central bank. Maarten Ackerman, Chief Economist for Citadel joins CNBC Africa for more.</p>


COVID-19: What to expect from finmin Mboweni’s emergency budget


<p>JOHANNESBURG (Reuters) &#8211; South Africa’s central bank cut its main lending rate by 50 basis points (bps) to 3.75% on Thursday, in what Governor Lesetja Kganyago said was a move aimed at shielding the economy from the impact of the new coronavirus.</p>



<p>The reduction comes on top of the 225 bps of rate cuts since March. The country has the highest number of coronavirus infections on the continent, with more than 18,000 identified cases.</p>



<p>(Reporting by Mfuneko Toyana and Olivia Kumwenda-Mtambo; Editing by Alexander Winning)</p>



<p>This article was first published on Reuters Africa <a href="https://af.reuters.com/article/investingNews/idAFKBN22X1OQ-OZABS">https://af.reuters.com/article/investingNews/idAFKBN22X1OQ-OZABS</a> and is republished with its permission.</p>



<p>For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a></p>


ArcelorMittal South Africa fined R3.64 million over hydrogen sulfide emissions

South African Reserve Bank cuts lending rate by 50 basis points


<p>A multi-billion rand loan guarantee scheme announced by South African President Cyril Ramaphosa last month is now officially in operation, with the assistance of the country’s major banks, including FNB, Investec, Standard Bank and Absa.</p>



<p>Ramaphosa announced the scheme as a measure to soften the blow of the <a href="https://www.cnbcafrica.com/videos/2020/05/13/how-african-economies-will-reawaken-from-the-covid-19-nightmare/">coronavirus pandemic </a>and national lockdown on banks as well as their individual and business clients.</p>



<p>The following statement provides more information:</p>



<p><strong>LOAN GUARANTEE SCHEME OPENS</strong></p>



<p>The Covid-19 loan guarantee scheme announced by President Cyril Ramaphosa in April will operate from today, 12 May 2020. The initial set of participating banks (Absa, First National Bank, Investec, Mercantile Bank, Nedbank and Standard Bank) are ready to accept loan applications from eligible businesses which bank with them.</p>



<p>The activation of the loan guarantee scheme follows the finalisation of legal details by National Treasury, the South African Reserve Bank and the Banking Association South Africa.</p>



<p>The loan guarantee scheme is an initiative to provide loans, guaranteed by government, to eligible businesses with an annual turnover of less than R300 million to meet some of their operational expenses. Funds borrowed through this scheme can be used for operational expenses such as salaries, rent and lease agreements, contracts with suppliers, etc.</p>



<p>Government and commercial banks are sharing the risks of these loans. Initially, the National Treasury has provided a guarantee of R100 billion to this scheme, with the option to increase the guarantee to R200 billion if necessary and if the scheme is deemed successful. Eligible businesses should contact their primary or main banker.</p>



<p>More details on the scheme can be found in a Frequently Asked Questions guide posted at <a href="http://www.treasury.gov.za/">http://www.treasury.gov.za/</a>&nbsp; <a href="https://www.resbank.co.za/">https://www.resbank.co.za/</a> Pages/default.aspx and <a href="https://www.banking.org.za/">https://www.banking.org.za/</a>.</p>



<p>Further queries should be directed to the individual banks, which are administering the scheme.</p>



<p>Jointly issued by National Treasury, The South African Reserve Bank and The Banking Association South Africa</p>



<p>Date: 12 May 2020</p>



<p>For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a></p>


Here’s how to apply for SA’s COVID-19 loan guarantee scheme

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<p>Investment holding company, PSG Group has reported a 17 per cent headline earnings per share increase for its full year results ended February. But the company has noted that it is bracing itself for the future of a post COVID-19 crisis. The company has declared a final dividend of 239 cents per share which is a 48 per cent decrease from the previous year. This decrease was due to Capitec, the group’s largest investment and contributor not declaring a final dividend in line with the South African Reserve Bank’s guidance to banks. PSG Group CEO, Piet Mouton joins CNBC Africa for more.</p>


PSG Group CEO on COVID-19 impact on business & post COVID-19 outlook

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<p>The COVID-19 lock-down is expected to cost South Africa’s economy over one trillion rand in lost output. One of the ways to fund South Africa’s recovery could be for the Reserve Bank to follow its peers globally and print money – a move, which up to now, the bank has been reluctant to do. That’s the view of Professor Brian Kantor, Chief Strategist &amp; Economist at Investec Wealth &amp; Investment.</p>


Investec on why the Reserve Bank should print money as part of COVID-19 response


<p>By Vuyani Ndaba</p>



<p>JOHANNESBURG (Reuters) &#8211; South Africa’s <a href="https://www.cnbcafrica.com/news/2020/04/15/poor-wealth-forecasts-for-south-africa-due-to-covid-19-sa-wealth-report/">economy will contract sharply this year</a> as activity is hit by the coronavirus outbreak, despite expectations the <a href="https://www.cnbcafrica.com/videos/2020/04/20/why-sarb-should-step-in-to-save-sa-companies-that-are-too-big-to-fail/">central bank</a> will cut interest rates again in May, a Reuters poll found on Monday.</p>



<p>The country is <a href="https://www.cnbcafrica.com/videos/2020/04/20/covid-19-martin-kingston-on-how-to-flatten-sas-recession-curve/">already in recession</a>, with the economy expected to have contracted 1.9% last quarter and to shrink an unprecedented 23% this quarter, the poll showed.</p>



<p><a href="https://www.cnbcafrica.com/videos/2020/04/14/sarb-cuts-rates-by-100-basis-points-to-record-low/">Another rate cut from the central bank</a> &#8211; which cut 100 basis points from borrowing costs on March 19 and then again on April 14 &#8211; is expected to help the finance ministry, which has already ramped up borrowing.</p>



<p>Economists now expect the economy to shrink 4.9% this year before recovering with 2.0% growth next year. Last month’s survey had suggested 0.3% and 1.2% expansions, respectively.</p>



<p>The forecasts showed huge levels of uncertainty due to a <a href="https://www.cnbcafrica.com/coronavirus/2020/04/09/sa-extends-lockdown-by-two-weeks-until-end-april/">country-wide lockdown</a>. Even the most optimistic <a href="https://www.cnbcafrica.com/videos/2020/04/20/african-billionaire-christo-wiese-on-covid-19-crisis-and-its-impact-on-sas-economy/">economist forecast</a> a contraction of 1.0%, while the most pessimistic predicted a 14.6% contraction.</p>



<p>Base effects may play a role next year, with the most optimistic economist forecasting growth of 5.1%, but some respondents said the lockdown would make it costly and difficult to bring the economy back to normality.</p>



<p>With consumers staying home and global oil prices falling sharply, inflation forecasts were also cut. Prices are now expected to rise 3.8% this year and 4.5% in 2021, compared with 4.2% and 4.6% in a March poll.</p>



<p>That would give the South Africa Reserve Bank room to ease policy.</p>



<p>Nine of 15 economists polled in the past week expected interest rates to be cut by 50 basis points to 3.75% in May, while three said the Bank would cut by 25 basis points. Two expected no move, and one pencilled in a 100 basis-point cut.</p>



<p>“Given the scale of the SARB’s forecast revisions and that of its surprise rate cut, there is little doubt now that its hawkish reservations to cut rates have been lifted,” said Francesca Beausang, economist at Continuum Economics.</p>



<p>On April 14 the central bank slashed its repo rate by 100 basis points to 4.25% in an unscheduled meeting, similar to the U.S. Federal Reserve’s emergency cuts last month, to mitigate the impact of the coronavirus.</p>



<p>“It seems as though it is keen to cut more than any emerging markets bank to make up for its previous reservations,” Beausang added.</p>



<p>Meanwhile, the balance sheet of the South African Reserve Bank looks more healthy and counter-cyclical in dealing with exogenous shocks than that of the National Treasury.</p>



<p>Economists answering an extra question said South Africa asking for an <a href="https://www.cnbcafrica.com/news/2020/04/14/imf-approves-immediate-debt-relief-for-25-countries-amid-covid-19-crisis/">International Monetary Fund</a> rapid financing facility without conditions or the SARB increasing its purchase of bonds on the secondary market would be most effective in mitigating the country’s funding crisis during the lockdown.</p>



<p>Other measures favoured included the SARB issuing coronavirus or disaster bonds targeted exclusively for the lockdown period or issuing more shorter-maturity bonds.</p>



<p>Capital Economics said the chances of South Africa turning to the IMF were rising.</p>



<p>“Finance Minister Tito Mboweni ruled out the possibility of any multilateral support that comes with conditions. But the IMF’s Rapid Financing Instrument (RFI) or its new Short-Term Liquidity Line might fit the bill,” it said in a note.</p>



<p>The RFI provides rapid and low-access financial assistance to member countries facing an urgent balance of payments requirement, without the need to have a fully fledged programme in place.</p>



<p>Mboweni ruled out an IMF adjustment programme last week and said the country didn’t need budget support, despite acknowledging that there would be a deep recession this year because of the global COVID-19 pandemic.</p>



<p>Asking multilateral institutions, especially the IMF, for cash is deeply unpopular with a faction in the governing African National Congress and trade unions that the party uses to rally support before elections. The ANC and two allies warned Mboweni earlier this month against seeking IMF assistance.</p>



<p>(Additional polling by Khushboo Mittal in Bengaluru; Editing by Jonathan Cable and Hugh Lawson)</p>



<p>This article was first published on Reuters Africa <a href="https://af.reuters.com/article/investingNews/idAFKBN2221Z2-OZABS">https://af.reuters.com/article/investingNews/idAFKBN2221Z2-OZABS</a> and is republished with its permission.</p>



<p>For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a></p>


South African economy to shrink 4.9% in 2020, SARB to cut rates in May – Poll

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<p>While some say South Africa’s government has moved swiftly in tackling the coronavirus pandemic, others say it should be doing more. Interventions by the Reserve Bank could also be increased to include rescuing big companies deemed too big to fail. That’s according to economists, including Alexander Forbes, Chief Economist, Isaah Mhlanga who joins CNBC Africa for more.</p>


Why SARB should step in to save SA companies that are too big to fail

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<p>The South African Reserve Bank has cut the repo rate by 100 basis points which leaves the repo rate at 4.25 per cent per annum. The May 2020 meeting of the MPC was moved earlier and took place today. The announcement comes a few weeks after the MPC cut the repo rate by 100 basis points in March as well. This is what the SARB governor Lesetja Kganyago had to say.</p>


SARB cuts rates by 100 basis points to record low


<p>JOHANNESBURG (Reuters) &#8211; South African lender Capitec said on Tuesday it would not pay a dividend for its full year, although profits rose by 19%, in line with guidance from the country’s central bank to <a href="https://www.cnbcafrica.com/southern-africa/2020/04/07/sarb-guides-banks-to-put-dividends-bonuses-on-hold/">scrap payouts amid the coronavirus outbreak</a>.</p>



<p>The <a href="https://www.cnbcafrica.com/news/2020/04/14/south-african-reserve-bank-cuts-repo-rate-by-another-100-basis-points/">South African Reserve Bank (SARB)</a> asked lenders to skip dividends for 2020 earlier in April to preserve capital for lending. Capitec was one of only a few lenders to not have already declared a dividend at this time.</p>



<p>“After extensive deliberation, the board decided to support the guidance of the Reserve Bank and decided against the declaration of the final ordinary dividend,” Capitec, which normally pays out 40% of profits to shareholders, said in its results statement.</p>



<p>The banks’ main rivals &#8211; South Africa’s big four lenders including FirstRand and Absa &#8211; all reported their results and declared dividends in March. The SARB has said dividends already announced can be paid.</p>



<p>Capitec reported a full-year profit rise of 19%, at the bottom end of a forecast range of 18% to 21% it outlined in a trading statement last month. [L8N2BC6T4]</p>



<p>Its headline earnings per share &#8211; the main profit measure in South Africa &#8211; stood at 5,428 cents ($3.02), verses 4,557 cents a year earlier.</p>



<p>The lender grew to become South Africa’s sixth largest bank by assets via a strategy focused on unsecured lending to lower-income consumers, and is generally perceived to be more exposed to any economic downturn as a result. Unsecured lending relies solely on consumers’ promises to repay.</p>



<p>A fear of a spike in bad debts following the <a href="https://www.cnbcafrica.com/east-africa/2020/04/08/how-african-economies-can-survive-the-covid-19-crisis/">outbreak of the coronavirus and a prolonged lockdown</a> to stem its spread have pummelled bank shares, with Capitec in particular suffering.</p>



<p>Its credit impairment charge rose by 14% over the year to February, in line with other banks which also saw impairments spike as the South African economy deteriorated.</p>



<p>($1 = 17.9976 rand)</p>



<p>(Reporting by Emma Rumney, Editing by Raju Gopalakrishnan)</p>



<p>This article was first published on Reuters Africa <a href="https://af.reuters.com/article/investingNews/idAFKCN21W0P2-OZABS">https://af.reuters.com/article/investingNews/idAFKCN21W0P2-OZABS</a> and is republished with its permission.</p>



<p>For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a></p>


COVID-19: South Africa eases lockdown to revive battered economy

South Africa’s Capitec says full-year profits rise by 19%, skips dividend


<p>The Monetary Policy Committee (MPC) of the <a href="https://www.cnbcafrica.com/southern-africa/2020/04/07/sarb-guides-banks-to-put-dividends-bonuses-on-hold/">South African Reserve Bank (SARB)</a> has cut the country’s interest rate by another 100 basis points, taking the repo rate to 4.25% per annum.</p>



<p>The following is a statement on behalf of the MPC of SARB:</p>



<p>The Monetary Policy Committee (MPC) of the South African Reserve Bank decided to cut the repo rate by 100 basis points. This takes the repo rate to 4.25% per annum.</p>



<p>The May 2020 meeting of the MPC was been moved earlier and took place today.</p>



<p>The MPC will host a media briefing today Tuesday 14 April 2020 at 11.30.</p>



<p>The conference will be hosted virtually on Zoom (details will be shared upon confirmation) and streamed live on the South African Reserve Bank’s (SARB) <a href="https://www.facebook.com/SaReserveBank/posts/2707685859357379">Facebook</a> and <a href="https://youtu.be/y6j7m9896Jk">YouTube</a> accounts. Questions will be submitted during the conference and will be responded to thereafter.</p>


Administrators propose sales plan for SA retailer Edcon, see potential job cuts

South African Reserve Bank cuts repo rate by another 100 basis points

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<p>Nedbank has assured shareholders that they will be paid their final dividend of R6.95 per share later this month. But the bank warned future dividends will be impacted by guidelines from South Africa’s Reserve Bank that dividends and bonuses be put on ice while the country fights the coronavirus. Mike Brown, Nedbank CEO joins CNBC Africa for more.</p>


SARB

SARB forecasts GDP contraction of 8.2% in 2020

What’s behind the rand’s volatile movements?

BNP Paribas on SA’s monetary response to the COVID-19 economic crisis

PwC expects a hold on MPC rates today, here’s why

Another rate cut on the cards tomorrow, says Absa’s Peter Worthington

Economists divided over SARB’s rate decision

COVID-19: What to expect from finmin Mboweni’s emergency budget

South African Reserve Bank cuts lending rate by 50 basis points

Here’s how to apply for SA’s COVID-19 loan guarantee scheme

PSG Group CEO on COVID-19 impact on business & post COVID-19 outlook

Investec on why the Reserve Bank should print money as part of COVID-19 response

South African economy to shrink 4.9% in 2020, SARB to cut rates in May – Poll

Why SARB should step in to save SA companies that are too big to fail

SARB cuts rates by 100 basis points to record low

South Africa’s Capitec says full-year profits rise by 19%, skips dividend

South African Reserve Bank cuts repo rate by another 100 basis points

Nedbank on future of dividends, executive bonuses

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SARB

SARB forecasts GDP contraction of 8.2% in 2020

What’s behind the rand’s volatile movements?

BNP Paribas on SA’s monetary response to the COVID-19 economic crisis

PwC expects a hold on MPC rates today, here’s why

Another rate cut on the cards tomorrow, says Absa’s Peter Worthington

Economists divided over SARB’s rate decision

COVID-19: What to expect from finmin Mboweni’s emergency budget

South African Reserve Bank cuts lending rate by 50 basis points

Here’s how to apply for SA’s COVID-19 loan guarantee scheme

PSG Group CEO on COVID-19 impact on business & post COVID-19 outlook

Investec on why the Reserve Bank should print money as part of COVID-19 response

South African economy to shrink 4.9% in 2020, SARB to cut rates in May – Poll

Why SARB should step in to save SA companies that are too big to fail

SARB cuts rates by 100 basis points to record low

South Africa’s Capitec says full-year profits rise by 19%, skips dividend

South African Reserve Bank cuts repo rate by another 100 basis points

Nedbank on future of dividends, executive bonuses

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