No trade deal for South Africa to avoid 30% tariffs, and blow to proposed cleaning tax
The rand remained at its weakest levels since May 15, reflecting investor uncertainty ahead of trade negotiations with the United States.
It traded at 18.13 against the US dollar. Meanwhile, the central bank cut its key interest rate by 25 basis points to 7.00%, a decision that was unanimously supported by the Monetary Policy Committee.
This move aligns with the median forecast of economists surveyed by Reuters.
Following the Reserve Bank’s announcement on Thursday to lower its inflation target, South Africa’s government borrowing costs have dropped to their lowest levels in five years, despite the finance minister not yet formally approving the change.
On Friday, 1 August, the rand was trading at R18.23 to the dollar, R24.05 to the pound and R20.81 to the euro. Oil was trading slightly lower at $71.88 a barrel.
Here are five other important things happening in and affecting South Africa today:
No US trade deal: South Africa has missed the trade deal deadline with the US and will incur a 30% tariff on exports starting in August. Despite efforts to negotiate, the Trump administration confirmed the tariff will take effect. However, the country still has a small window to turn things around. [BusinessTech]
Blow to the proposed cleaning tax: The Gauteng High Court has declared Tshwane’s monthly cleaning levy on residents, despite not using the refuse removal service, unlawful. The court also found that the City of Johannesburg acted unlawfully by imposing a refuse charge on residential buildings that were already paying a refuse tariff. [Moneyweb]
Interest Rate cut: The Reserve Bank’s Monetary Policy Committee (MPC) has voted to cut interest rates by 25 basis points, citing lower inflation in the country. [Daily Investor]
Court blow to ‘Please Call Me‘ idea-man: On Thursday, 31 July, South Africa’s Constitutional Court upheld Vodacom’s appeal against a 2024 Supreme Court of Appeal (SCA) judgment regarding the ongoing ‘Please Call Me’ matter. [Engineering News]
Scam alert: Standard Bank customers in South Africa should be cautious of a phishing scam related to the Financial Intelligence Centre Act (FICA). Cybercriminals are sending SMS messages that claim customers’ accounts will be blocked within two hours unless they update their FICA information. [MyBroadband]
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