Fuel shortage panic, and warning for anyone shopping on Temu in South Africa
Central banks from Washington to London to Jakarta are about to make their first assessments of economic damage after more than two weeks of conflict between the US and Iran.
Decisions in the coming week encompassing every member of the Group of Seven and eight of the world’s 10 most-traded currency jurisdictions are likely to confirm to investors that the spectre of a new inflation shock is already worrying enough to prompt heightened caution.
South Africa’s central bank will follow with its own meeting a week later, with a briefing scheduled for Thursday, 26 March.
Interest-rate bets that fully anticipated US easing have eroded, while possible hikes in the UK and the euro zone later in the year are now being priced in.
The South African Reserve Bank is also expected to keep rates unchanged at the upcoming meeting.
Such shifts will force policymakers to explain the extent to which such wagers are justified.
“For the Fed, much depends on how the conflict evolves. If the war ends quickly, we expect the unemployment rate to edge higher and core inflation to cool, allowing rate cuts of about 100 basis points this year,” said Eliza Winger and Anna Wong, Bloomberg economists.
“If the conflict drags on, keeping energy prices high and pushing inflation expectations higher, the calculus becomes far more difficult.”
The Iran war is the second time in just over a year that US President Donald Trump’s policies have collectively jolted global central banks, after his so-called Liberation Day tariffs in April attempted to rewire world trade.
That experience of uncertainty and risk will ensure that policymakers’ nerves stay taut in the months ahead.
Worse still for South Africa, while not currently the expected case, traders have started pricing in an interest rate hike as part of its economic landscape.
As with the deterioration of other macroeconomic metrics, the interest rate cycle will depend entirely on how long the war lasts.
The longer it continues, the more likely it is that market chaos will persist.
The rand is currently trading around R16.90 to the dollar, closing higher after a gruelling week. The rand is at R22.34 to the pound and R19.35 to the euro.
In commodities, oil prices are still above $100 a barrel, currently $103, while gold remains above the $5,000 mark at $5,022 per ounce.
5 important things happening in South Africa today
Fuel panic: The Fuels Industry Association of South Africa (FIASA) has warned large-scale fuel customers that off-contract fuel purchases are being halted amid panic-buying over shortages. The move to halt purchases aims to prevent shortages caused by panic buying. [EWN]
Temu tactics: Temu is running video ads on social media platforms in South Africa claiming shoppers can get an iPhone 17 Pro Max for free, but the offer is not what it appears. MyBroadband tested the campaign from start to finish and found it to be nothing but a contrived scheme designed to trick customers into making a purchase. [MyBroadband]
Be alert at shopping malls: Criminal syndicates are increasingly targeting South Africans for kidnapping during everyday activities such as visiting shopping malls, commuting, or collecting children from school. According to the latest figures from the South African Police Service, nearly 4,800 kidnapping cases were reported nationally between October and December last year. This works out to 53 kidnappings a day in South Africa, with more than half occurring in Gauteng. Gauteng accounts for a large share of cases partly because of its economic importance. [BusinessTech]
Morero out: The ANC in Johannesburg has reportedly decided to recall the current mayor, Dada Morero. The recall is due to politicking within the party between different factions, centred on Morero having lost the regional chairmanship to the newly elected deputy mayor, Loyiso Masuku. [TimesLive]
Kill the Boer: The political and diplomatic fallout of US ambassador Leo Brent Bozell’s comments on the “Kill the Boer” chant continues. After being served an official démarche for calling the chant hate speech, regardless of what South Africa’s courts say this week, the Government of National Unity has split over the approach of the ANC-led Department of International Relations. [News24]
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