South Africa
End of ‘hiking cycle’ has been reached – Sarb’s Kganyago
South African Reserve Bank publishes improved inflation forecast as the MPC votes to leave interest rates at 7%; uncertainty around the exchange rate is still a concern
London financial sector likely to ‘lose prominence’ following Brexit, says Sarb bulletin
South Africa to watch developments in London closely following Brexit vote, as domestic banks decrease exposures to the UK
People: FSB appoints Kganyago and Chan to committees; Bank of Spain picks new directors-general
Financial Stability Board replaces Menon and Tarullo with South African and HKMA governors; Bank of Spain makes appointments in financial stability and supervision; and more
Sarb shares back on sale after long legal battle
Central bank’s lawyers have been grappling with activist investors since before the global crisis; court victory allows Sarb to put shares on sale
Sarb’s Mminele concerned about ‘geopolitical risks’
Anti-globalisation and protectionist rhetoric are at the top of the deputy’s list when it comes to risks to the South African economy this year; Brexit negotiations also a concern
Sarb fines two major commercial banks for AML breaches
“Administrative sanctions” placed on Societe Generale Johannesburg branch and Absa Bank after staff found “weaknesses” in AML and terrorist-financing control measures
Central banks ‘critical’ in the development of blockchain
Large South African commercial bank examines what a central bank digital currency would look like, coining the phrase “sovereign blockchain”
Sarb offers insight into its macro-prudential toolkit
Central bank begins to outline macro-prudential tools needed to enforce financial stability mandate, seeking comment on appropriate instruments
Sarb governor underlines bank’s operational independence
The government cannot ‘dictate’ interest rate policy, governor Kganyago says, emphasising the South African Reserve Bank can implement ‘appropriate policy’ without political interference
Rand volatility not driven by South African economic ‘surprises’ – IMF paper
IMF working paper finds that surprises in commodity prices, domestic politics and US economics impact the volatility of the South African rand rather than economic surprises in South Africa or China
Sarb establishes anonymous whistleblowing hotline
New external hotline provides facility for the public to report misconduct to the central bank
Factors behind weak growth in advanced economies do not apply to South Africa – Sarb deputy
Mminele says 2008 recession did not create savings glut in South Africa, suggesting other factors such as a shortage of skills are responsible
Sarb governor fends off political criticism
Central bank would co-operate should inquiry into supervision powers be launched; monetary policy committee leaves rate on hold with the prospect of an end to the hiking cycle nearing
Kganyago justifies Sarb’s response to ‘troubling mix’ of issues
Sarb governor says the public should be “satisfied” but not “happy” with the current economic outlook, given that monetary policy has only offset some of the problems causing high inflation
Bundesbank places first representative in Africa
South Africa is “fertile ground” for investment, says Andreas Dombret; Jenny Kilp to be placed in Pretoria to help foster projects between Sarb and Bundesbank
Sarb governor stresses need for cooperative approach against cyber risk
New legislation will give central bank power over financial stability; now is the time for financial industry to become “proactive” in fostering “healthier” cyber culture, says Kganyago
Explicit communication from Sarb helped agents predict rate hikes – paper
Authors compare forecasts from 2013 and 2014 to identify whether specific terminology affected forecasting; “rising cycle” talk shaped expectations, paper shows
Sarb mulling changes to cash distribution process
South African Reserve Bank review finds ‘inefficiencies’ in current framework; changes could include alterations to the bank’s ‘branch footprint’ and supply chain
Sarb fines five banks for weaknesses in ‘control measures’
Investec Bank fined largest amount at 20 million rand; local branch of Standard Chartered faces 10 million rand penalty a month after another branch was reprimanded by MAS
Sarb review calls for changes to payment frameworks
An enforcement committee is to be created in the next six months as part of Sarb’s payment system review; the report identifies a number of “inadequacies” with current framework
Sarb to embark on ‘customised’ leadership development, deputy says
Mminele emphasises importance of leadership in addressing economic challenges; central bank to launch new leadership development programme ‘customised’ for each management level
IMF’s Lipton argues for greater economic inclusion in South Africa
David Lipton urges reforms to remedy the fact that one-third of the working population is “effectively excluded” from the economy; suggests policies to build confidence and lift growth
Slowdown in Brics increasingly down to domestic factors – Mminele
Sarb deputy says structural reform needed to foster global growth; sees role of domestic factors affecting Brics growth increasing since 2013
Sarb faces tough job amid ‘sobering’ outlook, IMF warns
Capital flows, sovereign rating and financial sector health form dangerous links, fund says, though South African authorities stress they have made preparations