5 important things happening in South Africa today

·12 Jun 2023

Here’s what is happening in and affecting South Africa today:

Inflation fight: The Organisation for Economic Co-operation and Development (OECD) says the South African Reserve Bank must continue fighting inflation, with South Africa’s current inflation rate at 6.8%. The OECD said that it expects inflation to remain above the SARB’s 4.5% target midpoint in 2023, but it expects it to return to the target range of 3%-6% in 2024 due to the delayed effects of monetary policy. It added that load shedding will continue to impact consumer prices. [Business Day]

Rand weakness: Although Allan Gray usually repatriates US dollars when the rand weakens rapidly, the investment asset company is currently avoiding this as it expects the rand to remain weaker for an extended period of time. The rand hit R19.91/$ last month, with many analysts believing the currency was oversold. However, Allan Gray’s Sean Munsie said that risks have increased and that the next six months could be tough for the rand. [News24]

Auditor rule: Listed and public interest companies will no longer be forced to rotate their audit firms every ten years; however, they will still need to appoint a new individual auditor after five financial years as per the Companies Act. In May, the Supreme Court of Appeal set aside the mandatory audit firm rotation rule (MAFR) that the Independent Regulatory Board of Auditors (Irba) introduced. The SCA said that the promulgation of the rule was beyond the legal powers of the Auditing Professions Act. [Moneyweb]

Earthquake damage: No fatalities or injuries have been reported in Gauteng following a 4.4 magnitude earthquake on Sunday morning. However, the City of Ekurhuleni’s emergency services (EMS’s) William Ntladi said that roof at Bedfordview shopping centre had collapsed and that residents had reported broken windows at their houses. The Council for Geoscience said it was investigating if mining activity caused the earthquake, as the epicentre was only a few kilometres from the East Rand Proprietary Mine. [TimesLive]

Markets: South Africa’s rand strengthened further on Friday after a strong week of gains boosted by encouraging economic data at home. Several economic data points aided the rand’s recovery last week, with first-quarter economic growth showing that the country had narrowly avoided a recession and central bank data showing the current account deficit had narrowed. On Monday (12 June), the rand was trading at R18.73/$, R20.13/€, and R23.56/£. Brent crude is trading at $73.76 a barrel. [Nasdaq]

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