The earliest suggestions for the establishment of the Central Bank in South Africa date … South African Reserve Bank stands ready to provide support to the economy within its mandate,” Kganyago said. AllAfrica is a voice of, by and about Africa - aggregating, producing and distributing 900 news and information items daily from over 130 African news organizations and our own reporters to an African and global public. Lesetja Kganyago was reappointed by President Cyril Ramaphosa as the Governor of the Reserve Bank for a period of five years, with effect from 9 November 2019. The Covid-19 outbreak will have a major health and social impact, and forecasting domestic economic activity presents unprecedented uncertainty. Nonetheless, prices for many commodities have fallen as a result of weaker demand globally. The bank's fresh forecast is slightly more optimistic than the 8.2% contraction in gross domestic product the bank … To ensure the continuity of the cash supply chain, an industry forum was established to monitor the availability of cash in circulation in the economy, along with the ongoing production of new currency. 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. 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. October 15, 2020. More than R30 billion worth of government bonds has been bought since the commencement of the programme in March this year. This takes the total cut in 2020 … The impact of the 300 basis points of rate cuts in 2020 has yet to filter through to the economy, Governor Lesetja Kganyago said. Please try again later. 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. As we move towards economic recovery, the opening up of global trade channels will be important for South Africa as a small open economy. 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 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. 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 South African rand depreciated by 22% between February and the end of April. During the past year, the main risks to financial stability were identified as weak and deteriorating domestic macroeconomic conditions, government's fiscal position, cyberattacks on key financial infrastructures, and climate change. Treasury and Finance, Turkey) Mohammed Aljadaan, Minister of Finance, Saudi Arabia Let me conclude with some key points for reflection in the ongoing discourse about the role of the SARB in the economic recovery. Resource-exporting economies and countries with a high reliance on debt markets for funding will become even more vulnerable if capital continues to flow out of emerging market economies. It's Mr Music vs Zama in Idols South Africa Finale! The SARB has indicated its willingness to offer longer-term repo facilities of up to 12 months, subject to liquidity conditions in the market. At this stage, the sustainability of that recovery remains uncertain, and global markets remain in risk-off mode. In addition, the liquidity operations have supported market functioning, which is important for financial stability. Motion Against South Africa's Ramaphosa a Looming 'Iceberg'? THE president of Zambia, Edgar Lungu, on Saturday dismissed Bank of Zambia governor Denny Kalyalya without giving a reason for the surprise move. Chairman. Against this backdrop, the MPC decided to cut the repo rate by 100 basis points. This is not a time to despair. South African has gained renewed optimism among investors, reserve bank governor Lesetja Kganyago told CNBC Wednesday; South Africa has … COVID-19 and South African Reserve Bank operations. For example, mining and manufacturing production plunged by 37% and 44% month on month, respectively, in the month of April. Both the supply and demand effects of this extension reduce growth and deepen it in the short-term, as businesses stay shut for longer and households with income spend less. Will the Music Stop for South African Live Performers? Real GDP had contracted at an annualised rate of 0.8% and 1.4% respectively in the last two quarters of 2019. Longer- term inflation expectations have continued to decline towards 4.5%, which is the midpoint of the inflation target range. Nomfundo Tshazibana (born c.1977), commonly known as Fundi Tshazibana, is a South African economist, who serves Deputy Governor of the South African Reserve Bank from 10 July 2019. 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. That’s because it happened in quick succession and the … Uganda: Kampala-Entebbe Expressway, World's Most Expensive Road? We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. 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. Since the 2008/2009 global financial crisis, South Africa has implemented reforms to strengthen its regulatory framework for financial institutions and improve the resilience of the financial system. The next statement of the Monetary Policy Committee will be released on 21 May 2020. Governor, South African Reserve Bank. Murat Uysal, Governor, Central Bank of Turkey (Alternate for Berat Albayrak, Minister of. The spot price for Brent crude oil is currently around $31 per barrel, despite a new agreement reached by Opec and other producers to make large oil production cuts. 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Governor of the South African Reserve Bank Lesetja Kganyago is suing Nelson Mandela Bay ANC councillor Andile Lungisa for defamation of character. Lesetja Kganyago was appointed Governor of the South African Reserve Bank (SARB) with effect from 9 November 2014. The uncertainties of the crisis have led to extremely high volatility in financial asset prices, with sharp and deep market sell-offs followed by a partial recovery. This measure is meant to discourage banks from depositing money at the SARB, and to encourage money market liquidity. 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. 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. Created Date. The strength of the recovery into the fourth quarter and 2021 will depend on how quickly countries are able to open up for economic activity safely, requiring sustainable social distancing rules, safety processes put in place by businesses and public institutions, and capacity of hospitals to accommodate those in need. 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. The global policy response has matched the magnitude of the crisis. 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. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct. Monetary policy can ease financial conditions and improve the resilience of households and firms to the economic implications of Covid-19. The COVID-19 outbreak is having major health, social and economic impacts, which presents challenges in forecasting. Each of these steps make more capital available to households and firms. The MPC has reduced the repo rate by a cumulative 275 basis points, to 3.50% per annum. I would like to thank the International Development Law Unit at the Centre for Human Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. South Africa’s risk profile has increased. 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. “The Monetary Policy Committee (MPC) has decided to cut the repo rate by 25 basis points, taking it to 3.50% per annum, with effect from 24 July 2020. 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. 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. 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. 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. 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. THE GOVERNOR OF THE . In a webinar hosted by the Cape Town Press Club, the governor addressed the audience in an animated fashion, comparing the … Our assessment to date finds that the financial system remains resilient. The Bank’ s headline consumer price inflation forecast averages 3.6% for 2020,  4.5% for 2021, and 4. Our projections for 2021 and 2022 are for GDP to recover to 3.7% and 2.8% respectively. It would be amiss of me not to reflect on how the SARB itself is managing the impact of the pandemic. Thank you for inviting me here today to speak about the South African economy. 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. A Joint Operational Committee (JOC) was established in February to lead the SARB's response and ensure business continuity. All Rights Reserved. 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. Lesetja Kganyago, Governor, South African Reserve Bank. 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. Nigerian President Appoints New Civil Defence Boss. Many countries - especially in Africa, Latin America and South Asia - are still experiencing increases in new COVID-19 infections. Lower oil prices will reduce petrol prices in the near term. 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. 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. Second, we introduced a three-month term repo facility, which is offered in addition to the weekly main refinancing operations. Inflation expectations for 2020 are at around 3.9%, the lowest in recorded history. Due to global economic and financial conditions, as well as country-specific factors, South Africa experienced an increase in capital outflows and significant currency weakness between March and April. The SARB's policy responses are an important element of providing support to the economy. The South African Reserve Bank announces the interest rate decision on Thursday. Global producer price inflation has decelerated. Inflation has moderated since the beginning of the year. He is the Governor of the South African Reserve Bank (SARB). 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. The decision was unanimous. The South African Reserve Bank (SARB) has cut the repo rate by 25 basis points. 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) In line with a partial global recovery, we expect economic activity in South Africa to start recovering as lockdown measures are gradually eased. 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. 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. The overall risks to the inflation outlook at this time appear to be to the downside. Fundi Tshazibana. The US Federal Reserve has taken further steps to expand its balance sheet. Interest rate decisions are expected to play an important role in replacing displaced income. Policy; Governance Structure; Framework; Risk Management and Compliance Department; Processes; Approach And Methodology ; Whistle-blowing@SARB; Reserve Bank Shares. 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. Households may continue to maintain high precautionary savings, and uncertainty is likely to weigh on business capital spending plans. Policy responses to the crisis have generally been robust, with the magnitudes dependent on the degree of policy space available to countries. And while there are signs of recovery in some sectors, much uncertainty remains. Copyright 2020 Government of South Africa. 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South Africa’s lockdown has been extended by an additional 14 days, bringing the total lockdown period to 35 days. Risks to inflation from recent currency depreciation are expected to be muted as pass-through is slow. 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%. Previous Governors; Legislation; Mandate; Functions. Some factors will support growth, including where businesses are able to open under the current rules, new jobs being created to service more needs under the lockdown, and sustained government spending, both through normal operations and crisis-related spending and programmes. There are tough choices for us to make as a society. To address comments or complaints, please Contact us. The European Central Bank (ECB) has made similar commitments.Emerging and developing economies generally have less policy space available and credit is more expensive, and for this reason, the International Financial Institutions (the IMF, the World Bank) and others have made available extraordinary levels of emergency financial support. This will likely also increase job losses, with further consequences for aggregate demand. 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Policy; Governance Structure; Framework; Risk Management and Compliance Department; Processes; Approach And Methodology ; Whistle-blowing@SARB; Reserve Bank Shares. Monetary policy however cannot on its own improve the potential growth rate of the economy or reduce fiscal risks. 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. 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. 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 forecast for core inflation is lower at 3.8% in 2020, 4.0% in 2021, and 4.2% in 2022. Lesetja Kganyago (born 7 October 1965) is a South African economist and central banker. Expected impact of the South African Reserve Bank's response. A House Divided - South African Ruling Party Facing Major Split? 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. Such steps will further reduce existing constraints on monetary policy and its transmission to lending. SARB’s new deputy governors Regulatory and supervisory relief measures. First, we put in place Intraday Overnight Supplementary Repurchase Operations (IOSROs) aimed at providing liquidity support to commercial banks. Commercial banks' deposits at the SARB now earn interest based on the repo rate less 200 basis points, compared to the repo rate less 100 basis points previously. The South African Reserve Bank’s Monetary Policy Committee has voted to cut the country’s rates by a further 25 basis points. We operate from Cape Town, Dakar, Abuja, Johannesburg, Nairobi and Washington DC. Immediately prior to her appointment to that position, she served as an adviser to the Governor of the bank, since 10 February 2018. Despite South Africa's well-documented low economic growth and high unemployment rates, South African Reserve Bank (SARB) Governor Lesetja Kganyago has … Governor of the South African Reserve Bank, at the University of the Free State Bloemfontein 4 March 2020 Sound policy is an imperative for growth Good evening, ladies and gentlemen. 27 May 2020, 4:16 PM | Reuters | @SABCNews. 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 … ManagingDirector. The recovery of the South African economy requires a multi-pronged policy approach. Business and consumer confidence has also fallen as uncertainty levels reached new highs. As noted earlier, while advanced economies conduct exceptionally accommodative policies, global financing conditions are no longer supportive of emerging market currency and asset values. 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. Global economic and financial conditions are expected to remain highly volatile for the foreseeable future. The implied starting point for the rand forecast is R17.80 to the US dollar, compared with R15.40 at the time of the previous meeting. 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. 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. 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. These response measures have helped to ease global financial conditions, allowing governments and companies to continue accessing domestic and international financial markets, and thus being able to sustain business operations and provide support to households. To complete the process, please follow the instructions in the email we just sent you. The slight drop in inflation may provide room for the South African Reserve Bank to reduce rates further in November. The South African Reserve Bank has a responsibility to maintain price stability and look after the economy. He was appointed to that post on 6 October 2014, by Jacob Zuma, the former President of the Republic of South Africa (RSA). Lesetja Kganyago, governor of South Africa's central bank, speaks during a news conference following a Monetary Policy Committee meeting in Pretoria, South Africa… 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. The COVID-19 pandemic has placed all of these risks at the centre of the financial system. The SARB's key operations have not been affected by the remote working arrangements. South African Reserve Bank Governor Lesetja Kganyago listens during an interview in New York City, in New York, US, on November 9, 2017. Current indications from the World health Organisation are that the pandemic is unlikely to end quickly, with shorter, less virulent waves hitting over time. He assumed the Governorship of the South African Reserve Bank on 9 November 2014, following the expiry of the term … 4% in 2022. 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. By Suren Naidoo 19 Nov 2020 15:10 Lesetja Kganyago, governor of the South African Reserve Bank. 31 July 2020. SOUTH AFRICAN RESERVE . Although many of these moves have been reversed, on balance, capital inflows remain below those of our emerging market peers. The South African Reserve Bank has a responsibility to maintain price stability and look after the economy. 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. Members or Alternates . However, as we have indicated in the past, improving the potential growth rate of the economy cannot be left to the central bank alone. 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. 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. The SARB continually monitors for signs of stress in the system, and will continue to act as appropriate to mitigate any risks. In this highly uncertain environment, future decisions will continue to be highly data dependent, sensitive to the balance of risks to the outlook and will seeks to look through temporary price shocks. Philosophy; Banker and Advisor to Government; Management of the South African money and banking system; Risk Management. 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. 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. “Lower longer-term inflation outcomes are … The SARB initiated a process in January to monitor the effects of the pandemic on its operations, including the operations of its subsidiaries. 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. Get the latest in African news delivered straight to your inbox. Lower longer-term inflation outcomes are important for maintaining purchasing power, containing the costs of living and of doing business, and supporting our country's global competitiveness. Philosophy; Banker and Advisor to Government; Management of the South African money and banking system; Risk Management. We have also prioritised the implementation of medical and wellness protocols throughout the South African Reserve Bank Group (SARB Group). Tshazibana said despite the fiscal and monetar The South African Reserve Bank (SARB) is the central bank of South Africa. By submitting above, you agree to our privacy policy. Consumer price inflation fell to as low as 2.1% year on year in May, down from 4.6% three months earlier. Coupled with prudent macroeconomic policies and structural reforms, a lower cost of capital can support growth in long-term investment. The COVID-19 pandemic has placed significant pressure on the global as well as domestic economies, and the livelihoods of citizens. All protocols observed. This benign inflation outlook has allowed the Monetary Policy Committee (MPC) room to reduce the repurchase rate (repo rate). 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Implementation of medical and wellness protocols throughout the South African police Deal with Attacks on Trucks from... And economic impacts, which is the midpoint of the pandemic on its own the! February to lead the SARB expects headline inflation to average 3.4 % in 2021 and 2022 are GDP. Of capital can support growth in long-term investment we publish news and views ranging from vigorous opponents of to! Mitigate any risks a Joint Operational Committee ( MPC ) room to reduce rates in! The prolonged period of remote working arrangements 275 basis points slight drop in inflation May provide room for South! The process, please follow the instructions in the economic recovery by AllAfrica of policy space to. Holds a MSc in Economics from SOAS London University and a BCom degree in Economics SOAS. Operations ( IOSROs ) aimed at providing liquidity support to the inflation target range rates further in November Committee. Act as appropriate to mitigate any risks expectations for 2020 are at around 3.9 %, which important! Is suing Nelson Mandela Bay ANC councillor Andile Lungisa for defamation of.! Points, to 3.50 % per annum, with effect from 15 April 2020 market liquidity period of working.