Dawie Roodt warns the government is losing control, and R7 billion blow to WeBuyCars
The South African rand weakened slightly in early trading on Thursday as cautious investors monitored US-Iran peace talks and processed local data showing a surge in April inflation.
The inflation surge was attributed in part to the ongoing war’s impact on prices. The rand traded at 16.5225 against the dollar, about 0.4% below its previous close.
Iran has announced it is reviewing Washington’s latest proposal on ending the war, following comments from US President Donald Trump, who said he was willing to wait a few days for “the right answers” from Tehran.
Like many risk-sensitive currencies, the rand often responds to global market trends. It has been particularly affected by global sentiment since the outbreak of the U.S.-Israeli conflict with Iran at the end of February.
In Africa’s largest economy, inflation rose sharply in April, increasing expectations that the central bank will raise interest rates when it reviews its monetary policy next week.
Johann Els, chief economist at PSG Financial Services, indicated that inflation could reach 5% by mid-year.
He anticipates that the South African Reserve Bank will increase interest rates by 25 basis points to mitigate second-round inflation effects.
On the Johannesburg Stock Exchange, the Top-40 index was down 0.4% during the last session.
On Friday, 22 May, the rand was trading at R16.46 to the dollar, R22.10 to the pound, and R19.12 to the euro. Gold is trading lower at $4,526.39 an ounce, while oil prices were at $104.10 a barrel.
5 important things happening in South Africa today
Government losing control: The National Treasury’s draft Capital Flow Management Regulations proposes that South African residents must sell their gold, foreign currency, or crypto assets to the National Treasury if they exceed a specific threshold. Renowned economist Dawie Roodt argued that the true reason for the government’s new regulations and crackdown on cryptocurrencies is that it is losing control. [MyBroadband]
WeBuyCars loses R7 billion: WeBuyCars, one of South Africa’s largest used-vehicle trading platforms, has lost 31% of its value over the last four months on the back of increased competition from cheap Chinese cars and poor results. [TopAuto]
FlySafair responds to allegations: The National Consumer Commission has referred South African airline FlySafair to the National Consumer Tribunal for overbooking flights. FlySafair said it has cooperated with the NCC’s investigation fully, and the issue boils down to a difference in legal interpretation of the laws. [BusinessTech]
South Africa officially has an ambassador in the US: South Africa’s Roelf Meyer has presented his credentials to President Donald Trump in Washington DC. Meyer is now accredited as South Africa’s ambassador to the US. He said he was warmly welcomed. [eNCA]
Allan Gray has a lot to say about Cell C: Speaking at Allan Gray’s The Times roadshow, Allan Gray’s Sean Munsie explained why the asset manager is one of the largest investors in Cell C, when other market participants appear to be running the other way. Munsie believes Cell C provides a strong investment opportunity, with the telecoms provider reinventing itself over the past decade. [Daily Investor]
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