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Central African Currency Union Targets Closer Regional Ties
Macroeconomic performance good last year in uncertain global economy
Vulnerabilities with region's financial sector are source of concern
Non-oil economic activity constrained by inadequate infrastructure
July 5, 2012--High oil prices have enabled the Central African Economic and Monetary Community (CEMAC) to accumulate foreign reserves and comfortably finance an ambitious investment program, maintaining growth while keeping debt in check.
But, the IMF said in its regular assessment of the currency union’s economy, the ongoing problems in the eurozone underline the need to better coordinate fiscal policies and to strengthen external competitiveness.
Financial sector stability requires stronger supervision of the union’s banking system as well as enhancing the regulatory framework, including the crisis management framework. In addition, the non-oil economy is constrained by structural obstacles, including low intraregional trade and inadequate infrastructure.
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Source: IMF
IMF Working paper-Estimating the Implicit Inflation Target of the South African Reserve Bank
July 5, 2012--Summary: This paper applies a state-space approach to estimate the implicit inflation target of the South African Reserve Bank (SARB) since the adoption of the Inflation Targeting (IT) framework.
The paper's findings are two. First, although the official inflation target range is 3.6 percent, in practice, the SARB seems to have aimed for the upper segment of the band (41.2 .6 percent) for most of the period, despite the substantial variation of the output gap. Second, the estimation results show that the implicit inflation target varied over time, and in recent years it has shifted toward the upper limit of the inflation target range. This perhaps suggests that since the outbreak of the financial crisis in 2008, the SARB's tolerance for higher inflation has somewhat increased to better support economic activity.
view the IMF Working paper-Estimating the Implicit Inflation Target of the South African Reserve Bank
Source: IMF
JSE trims gains in late trade
July 5, 2012--The JSE pared earlier gains late on Thursday, once initial optimism faded after central banks in Europe and China cut interest rates to spur growth, and upbeat US employment data were released.
The European Central Bank (ECB) cut rates by 25 basis point to a record low of 0.75% and also cut its deposit rate to zero in an attempt to spur eurozone growth. The Bank of England (BoE) monetary policy committee raised its asset-purchase target by GBP50 billion to GBP375 billion.
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Source: FIN24
ECB rate cut weakens rand further
July 5, 2012--The rand weakened for the second consecutive day against the US dollar on the European Central Bank's (ECB) decision to cut rates.
The bank cut rates by 25 basis points to a record low of 0.75%‚ “but refused to do anything else to address the eurozone confidence crisis‚” Holger Schmieding‚ Chief Economist at London-based Berenberg Bank‚ said in a note.
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Source: FIN24
JSE up slightly in muted trade
July 4, 2012--The JSE ended a tad higher on Wednesday in lacklustre trade.
Gold shares gave up earlier gains to finish flat‚ while platinum shares came under selling pressure.
At 17:00 local time‚ the JSE All Share [JSE:J203] index was up 0.16% to 34 041.12 points‚ with resources and gold shares flat (0.08% and 0.01% respectively)‚ while platinum counters lost 1.15%.
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Source: FIN24
SA to launch debut Islamic bond
July 4, 2012--South Africa is preparing to launch sub-Saharan Africa's first Islamic bond, paving the way for issues by other countries in the region, officials said on Wednesday.
Thuto Shomang and Monale Ratsoma of the Treasury’s government borrowing department told Reuters that South Africa ias leaning towards a dollar-denominated, five-year sukuk, using an ijara structure.
"It's the one that seems to attract investors’ interest.
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Source: FIN24
Rand firms, bonds rally
July 3, 2012--South Africa's rand rallied as much as 1.1% against the dollar on Tuesday to its strongest level in 7-1/2 weeks, boosted by increased demand from local companies repatriating their foreign currency to meet corporate year-end needs.
Government bonds also strengthened, pulling yields to multi-month lows as demand from foreigners rose, particularly at the higher end of the curve.
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Source: FIN24
•JSE's new Equity Trading Platform in SA after Decade in London
Move marks new era for exchange
July 2, 2012--The Johannesburg Stock Exchange (JSE) celebrates the start of a new era for its equity market today with the launch of equity trading platform Millennium Exchange(TM), developed by technology solutions provider MillenniumIT.
The day also marks the moving of the platform from London, where the trading engine has been situated for ten years, to the JSE building in Johannesburg. These changes are aimed at enhancing operational efficiencies for market participants, who are expected to benefit from executing transactions almost 400 times faster than the present trading solution.
The platform is housed within the JSE’s recently completed new state of the art data centre based on Tier 3 specifications and is designed to ensure 99.98% availability.
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Source: Origo Trading
JSE relatively flat amid consolidation
July 2, 2012--The JSE hovered in flat territory at noon on Monday, looking to consolidate after a fairly strong run on Friday, which was linked to the European Union leaders' resolve to deal with eurozone debt crisis.
At 12:08 local time‚ the JSE All Share [JSE:J203] index was down 0.13% to 33 665.06 points‚ with resources losing 0.55%‚ gold shares shedding 1.14% and platinum counters giving up 1.66%.
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Source: FIN24
Rand ends steady at one month high
July 2, 2012--South Africa's rand steadied at a month high against the dollar on Monday, underpinned by good flows into the local bond market during a global risk rally that is propping up emerging markets.
Efforts taken by European leaders to stem the region's debt crisis on Thursday had cheered investors, who in turn now felt they could buy into riskier assets such as the rand.
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Source: FIN24
