Browsing: South African Reserve Bank (SARB)

South Africa’s Central Bank hikes repo rate to 7.25%. www.theexchange.africa

South Africa Repo Rate Hike to Hit Consumers

Industry and Trade
  • South African Reserve Bank (SARB) announced a 25 basis points hike, taking the repurchase rate (repo rate) to 7.25 per cent from 7 per cent.
  • The prime lending rate will increase from 10.5 per cent to 10.75 per cent.
  • Inflation in South Africa was reported to have eased to 7.1 per cent in December 2022.

The South African Reserve Bank (SARB) has announced a 25 basis points hike, taking the repurchase rate (repo rate) from 7 per cent to 7.25 per cent. The prime lending rate in the country is expected to increase from 10.5 per cent to 10.75 per cent as a result of the change, which will come into effect on January 31, 2023.

The repo rate, also known as the repurchase rate, is the rate at which the South African Reserve Bank lends money to commercial banks. The SARB, and essentially all central banks, use the repo …

Africa’s debt sustainability struggles amid currency vulnerability

Investing

Although the pandemic strained debt repayments, the G20’s Debt Service Suspension Initiative, led by the World Bank and the International Monetary Fund (IMF), eased Africa's debt sustainability struggles.

  • Over the past decade, African countries have accumulated external debt at a faster pace.
  • African nations have had to deal with exchange rate pressures caused by inflation, rising global interest rates and growing uncertainty caused by currency vulnerability.
  • Reducing currency vulnerability can reduce the dependence on foreign currency loans and promote sustainable economic growth.

Debt accumulation 

Over the past decade, African countries have accumulated external debt at a faster pace. The countries have capitalized on abundant, low-cost international credit for fiscal and balance-of-payments funding to help drive development plans.

Africa’s total external debt, accrued by both the private and public sectors, owed to foreign lenders, has surpassed $1 trillion. The related annual debt servicing costs broke through the $100 billion threshold for…

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Namibia debt struggles despite promising economic prospects

Countries

Namibia's debt-to-GDP ratio has continued rising further above the central government debt ceiling of 35% of gross domestic product as of March 2021. 

  • Namibia has consistently put out a series of measures to restructure the economy, enhance economic development, generate employment, and alleviate poverty and inequality.
  • Improving the business environment, promoting access to capital, improving governance, and reducing skills mismatches are crucial for stimulating growth and achieving long-term debt sustainability.
  • Implementation of the government’s fiscal reduction agenda is essential for debt sustainability.

Since its independence, Namibia has had an outstanding political stability track record.

Sound macroeconomic policies, moderate economic growth, poverty alleviation, and natural resource protection define Nambia's stability. The country has made significant accomplishments despite geographical limits. Namibia has confronted apartheid, colonial legacies, and the difficulties of establishing a national government. However, considerable obstacles persist.

Chronic massive unemployment, the devastation of HIV/AIDS, and one of the world’s most lopsided…

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IMF approves $4.3b in Emergency Support to South Africa

Countries

The International Monetary Fund (IMF) executive board approved $4.3 billion requests for emergency financial from South Africa to address the challenging health situation and severe economic impact of the COVID-19 shock.

The funds are under the Rapid Financing Instrument (RFI) which aims at meeting the urgent balance of payment (BOP) needs stemming from COVID-19 pandemic outbreak, limit regional spillovers and catalyze additional financing from other international financial institutions.

The outbreak of the pandemic has led to a sharp economic contraction and significant financing need in South Africa.

Over the last decade, economic activity in the country has weakened despite government spending, this has resulted in increased poverty, unemployment and income inequality.

“South Africa’s economy has been severely hit by the COVID-19 crisis, reporting the highest number of cases in sub-Saharan Africa. A deep economic recession is unfolding as the decline in domestic activity and disruptions in the global supply chain …