South Africa's Rate Decision: Giving Priority To Foreign Investors


Friday, November 22, 2019   / 03:00PM / United Capital Research / Header Image Credit: Brand Spur


Recently, the South African Reserve Bank held its last monetary policy committee meeting for 2019, maintaining the status quo. Despite the widespread expectation of a rate cut, as inflation rate touched a nine-year low, at 3.7% in Oct-19, the MPC kept the country's key policy rate at 6.5%. Accordingly, we highlight our opinion on this decision and share our outlook for 2020.


Currently, the South African economy is in a delicate position, stuck between igniting economic growth and limiting severe capital outflows. Earlier, the country escaped a downgrade in its credit rating to junk status from Moody's, but its outlook was revised downward from stable to negative. Bearing the above in mind, we believe the decision to maintain the status quo and not join the global easing bandwagon, must have been spurred by the need to keep foreign investors happy. However, we believe a rate cut will have eased borrowing costs and soften pressures on the country's mounting debt.


Looking ahead into 2020, judging by the spread of the policy decision, with two out of five members choosing to cut, the outlook for monetary policy seems commingled but is pointing to an accommodative policy. However, the elephant in the room remains the need for extensive fiscal reforms on the power sector, which could ignite capital investments, and clear the dilemma that monetary policy is encumbered with.


Proshare Nigeria Pvt. Ltd. 

Top African Stories


  • S.Africa keeps rates on hold as inflation risks balanced: South Africa's central bank kept its repo rate unchanged at 6.5% in a close decision on Thursday, saying it wanted to see inflation expectations closer to the midpoint of its target range, despite a sustained drop in headline inflation. Read more

  • Egyptian Tourism Revenue Surges to a Record: Egypt visitor numbers are returning to their 2010 peak after years of upheaval as authorities look to adventure and cultural tourism to help fuel growth for a key source of foreign exchange, an official said.  Read more

  • Discoveries to help Senegal's gas-to-power switch - minister: Major gas discoveries offshore Senegal will enable the West African nation to switch its coal and oil-fired power plants to gas generation in the coming years, Petroleum and Energy Minister Mouhamadou Makhtar Cisse said on Thursday.  Read more

  • S.African inflation slows to eight-year low, putting rates cuts back in picture: South African consumer inflation dropped in October to its lowest level since February 2011 as fuel prices fell sharply, raising the chances of an interest rate cut by the central bank on Thursday. Read more

  • Tanzanian LNG project faces possible delays: The envisaged liquefied natural gas (LNG) plant project could be delayed further following the temporary suspension of talks on the Host Government Agreement (HGA). Read more

  • Angolan government raises US$3 billion from issuing Eurobonds: The Angolan government on Tuesday issued US$3 billion in Eurobonds, in two tranches with different maturities, on the London financial market, according to an official statement issued on Wednesday in Luanda. Read more



Looking Forward



Nov-19 Policy Rate Decision - November 2

8th Oct-19 Net Reserves - November 29th



Nov-19 Policy Rate Decision - November

25th Sep-19 Gross Reserves - November 29th



Nov-19 Policy Rate Decision - November 25th

Nov-19 Consumer Price Index - November 30th



Oct-19 CPI YoY - November 22nd

Oct-19 Money Supply M3 YoY - November 29th



Q3-19 GDP Report - November 22nd

Nov-19 Policy Rate Decision - November 26th


South Africa

Oct-19 Private Sector Credit - November 29th

2020 Budget Presentation - November 29th



Nov-19 Policy Rate Decision - November 27th 


Visit African Markets in Proshare MARKETS

Proshare Nigeria Pvt. Ltd.


 Proshare Nigeria Pvt. Ltd. 


Related News 

1.      October 2019 Macroeconomic Update - Comercio Partners

2.     Moody's Rating: Life-Saver to South Africa's Economy?

3.     The United States, Japan, and The Global Economy

4.     Mid-Term Budget Policy Statement: Should South Africa Be Worried?

5.     Argentina Crisis Adds to Neighboring Economies' Headwinds

6.     Slowing Growth and Interest Rate Cuts in Frontier Economies

7.     Nigeria - South Africa New Trade Deal: Anything to Cheer?

8.     Major UK Banks Prepared for Brexit Challenges Ahead

9.     Chinese President Meets Solomon Islands PM, Pledging Closer Cooperation

10.  CIV, Kenya and Ireland Join The Top Five of 20 Markets With The Greatest Potential

11.   Can SSA's Biggest Economies Join The 2nd Monetary Easing Cycle?

12.  Protectionism Choking Global Growth Prospects

13.  Xenophobia - Organised Crime or Spontaneous Fear?

14.  Monetary Policy In Africa: Singing A Global Chorus?

15.  Protectionism Choking Global Growth Prospects

16.  Xenophobia - Organised Crime or Spontaneous Fear?

17.  Monetary Policy In Africa: Singing A Global Chorus?

18.  UK Political Volatility Means Risk of No-Deal Brexit Is Still Significant

19.  Egypt, Geely Sign MoU For Producing Electric Cars

20. Kenya Lending Rate Cap Weighs on Bank Earnings and Loan Growth



Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Related News