R500 million state contracts under fire, and good news for green ID book holders in South Africa
The rand held steady on Wednesday as investors bought into riskier assets following dovish comments from Federal Reserve Chair Jerome Powell, who left the door open to further US interest rate cuts.
The rand traded around R17.35 against the dollar during the day, roughly up 0.2% on Tuesday’s close, while the greenback last traded flat against a basket of currencies.
It continued at those levels overnight, starting the day on Thursday (16 October) at the same.
Like other risk-sensitive currencies, the rand often takes cues from global drivers such as US policy and economic data.
Powell said the end of the Fed’s long-running effort to shrink the size of its bond holdings may be coming into view.
“Extrapolating that back to ZAR implies that risk appetite will likely remain elevated. Should global central banks continue to ease, and AI investment continues to yield efficiencies that boost profitability, risk appetite will remain supportive of the ZAR,” said ETM Analytics in a research note.
“With gold and platinum prices surging higher and SA’s terms of trade as strong as ever, the probability is high that the ZAR will regain its footing later this week or next and attempt another assault on the 17.00/$ level.”
In other economic data, Statistics South Africa data showed that retail sales rose 2.3% year-on-year in August, after rising by a revised 5.7% in July. Economists polled by Reuters had expected sales to rise 4.4%.
On the Johannesburg Stock Exchange, the Top-40 index was last up 0.3%. South Africa’s benchmark 2035 government bond was also stronger, as the yield fell 5 basis points to 9.09%.
The rand starts the day trading at R17.35 to the dollar, R23.28 to the pound and R20.23 to the euro. Oil is trading lower at $62.43 a barrel, with gold at $4,232.90 an ounce.
5 important things happening in South Africa today
R500 million RAF contracts under the scope: Parliament’s Standing Committee on Pulic Accounts has grilled the Road Accident Fund over R500 million worth of media and marketing contracts which appear to have flouted tender processes and contain “problematic invoices” charging exorbitant amounts for simple items, like bucket hats. The RAF has defended the contracts and processes, saying they delivered value. [News24]
Green ID books sticking around for longer: Given production and capacity limitations, the earliest that the Department of Home Affairs will be able to discontinue South Africa’s green ID book is 2028—if everything runs perfectly. In all likelihood, this timeline would be pushed back further to 2031 or beyind. This means the country’s 16 million green ID book holders will still be valid for years to come, even as Smart ID access and adoption grow. [MyBroadband]
Ramaphosa cuts intelligence head: President Cyril Ramaphosa has suspended Inspector-General of Intelligence, Imtiaz Fazel, with immediate effect. The suspension follows a complaint received by the Joint Standing Committee on Intelligence about Fazel’s conduct. The suspension comes amid wider investigations into the SAPS and South Africa’s security sector. [BusinessLive]
Municipality owes more than it makes: Matjhabeng Local Municipality in the Free State is the only municipality in South Africa whose debt exceeds its income. This is largely due to a concessionary loan given to Matjhabeng in 2024 as part of the National Treasury’s municipal debt relief programme. Stats SA recently revealed that Matjhabeng has a debt-to-income ratio of 137.5%, making it the only municipality in the country to surpass 100%. [Daily Investor]
Forget BEE for transformation: Professor William Gumede argues that South Africa’s transformation agenda must be grounded in pro-growth policies, education, technical skills, and competence-based governance, rather than outdated ideology or populist slogans. The government’s current approach of corruption, mismanagement of state entities, and ideology-driven policies has undermined growth and risks “breaking the country”, he said. [Newsday]
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