Money flooding into South Africa, and new rules for South Africans who lose their driving licence
The rand experienced a slight decline after reaching its strongest level in over two years, as traders took profits on Friday and awaited S&P Global’s upcoming review of South Africa’s sovereign credit rating with caution.
It was trading at 17.17 against the dollar, approximately 0.7% weaker than Thursday’s close.
On Friday, South Africa achieved its first credit rating upgrade in nearly two decades, as S&P Global announced its latest sovereign rating decision, reflecting investor optimism about the country’s reform efforts.
Since 2020, all three major rating agencies had classified South Africa as sub-investment grade, or “junk.”
Looking ahead to next week, the economic calendar will include October’s consumer inflation figures and September’s retail sales data on Wednesday, followed by the central bank’s interest rate decision on Thursday.
“Given the generally favourable environment, we believe the Monetary Policy Committee (MPC) will cut rates by 25 basis points, moving the real policy rate closer to neutral,” said economists at Nedbank in a research note.
On Monday, 17 November, the rand was trading at R17.11 to the dollar, R22.50 to the pound and 19.85 to the euro. Oil was trading slightly lower at $63.80 a barrel.
5 important things happening in South Africa today
Money flooding into South Africa: Structural reforms have led to a resurgence of foreign investors in local equities, adding nearly R5 trillion to the JSE’s market capitalisation this year. The FTSE/JSE Top 40 has risen 55% in dollar terms, outperforming the MSCI Emerging Markets Index by 30% and developed world indices by 20%, reflecting a positive sentiment toward South African assets. [Business Day]
New rules for South Africans who lose their driving licence: Motorists in South Africa whose licences are cancelled due to the new driving licence penalty points system will face driving simulator tests and psychological evaluations for rehabilitation. The Administrative Adjudication of Traffic Offences (Aarto) Act will require frequent offenders exceeding the demerit point threshold to participate in a “driver rehabilitation programme.” [MyBroadband]
Severe storm warning: A Level 9 storm hit Gauteng over the weekend, uprooting trees and flooding roads, leaving neighbourhoods in darkness. This followed an Amnesty International report highlighting increasing flood risks in South Africa. [Daily Maverick]
Plan to remove Ramaphosa: There are calls within the ANC to oust Cyril Ramaphosa, disband the NEC, and replace the leadership with a national task team led by former president Thabo Mbeki. [BusinessTech]
Best news in over 20 years: South Africa received its first credit rating upgrade in nearly 20 years, as S&P Global raised its foreign-currency long-term sovereign rating to “BB” from “BB-“. The upgrade was cited as being driven by stronger growth prospects and an improved fiscal outlook, aided by better performance at state power utility Eskom. [CNBC Africa]
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