5 important things happening in South Africa today

·22 Jul 2022

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

Rate hikes: South Africans should expect sharp interest rate hikes to continue as the Reserve Bank looks to beat rising inflation and stem talk of recession. The central bank hiked rates by 75 basis points on Thursday, adding pressure on households carrying debt. Economists expect two more sizeable hikes this year, pencilling in another hike of 75bp in September, and 50bp in November, which would take the repo rate above pre-pandemic levels. [Fin24]

Taxman calling: SARS is going after collapsed crypto scheme Mirror Trading International, looking for R931 million it says it is owed. Of the R931.1 million claimed by SARS, R350 million is for regular income tax, R580 million is for under-statement penalties, and R1 million is for interest. MTI collapsed in the middle of 2021. The scheme promised investors returns of over 10% and claimed its trades were handled by advanced software. CEO Johann Steynberg fled to Brazil, where he was arrested. [Moneyweb]

Promises, promises: Transport minister Fikile Mbalula has promised to have revitalised railway corridors up and running by September and October, as part of his department’s rehabilitation project for South Africa’s crumbling rail infrastructure. The R52 billion project aims to revitalise ten corridors connecting major metropolitan areas. Prasa controls around 40 corridors, with Transnet handling long-distance tracks. The railways have fallen into disrepair and have been subject to vandalism and theft. [Daily Maverick]

Unrest warning: Former president Thabo Mbeki has taken pot shots at president Cyril Ramaphosa’s administration, warning that his failure to address social ills like poverty, unemployment, criminality and inequality will lead to more civil unrest akin to an “Arab Spring”. He said that the government should serve the people with no expectation of reward and strive to be non-racial – a goal it is currently missing. Instead, society is faced with lawlessness and corruption in government, and he said he feared that “one day it’s going to explode”. [TimesLive]

Markets: South Africa’s rand jumped against the dollar on Thursday after a larger-than-expected rate hike by the central bank. The languishing rand jumped 0.7%, reversing losses of 0.5% earlier in the day. Economists said the terminal repo rate level is expected to get to 6.5%, saying there will be more tightening in the cycle to come. On Friday, the rand was trading at R17.06 to the dollar, R20.41 to the pound and R17.38 to the euro. Brent crude is trading at $105 a barrel. [Reuters]

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