August 24, 2015 – Back in July, it was reported that the South African Reserve Bank (SARB) was hinting at a rate increase to curb inflationary pressures. One source commented, “The benchmark interest rate the Brics group nation is 5.75%, and if an increase materialises this week, it could be of 25 basis points margin. The SARB meeting is on 21-23 July and the announcement will be at the end of the meeting.” The SARB raised domestic rates for the first time in a year due to a weaker rand, which has declined nearly 10% against the dollar.
As of August, South Africa’s economy is facing a turbulent patch as financial policies are being complicated by interest rate normalisation in the United States and a slowdown in China’s growth.
Meanwhile, unemployment has been rising in South Africa over the past five years, and currently stands at a ten-year high of 34.9%. According to The Guardian, South Africa is “struggling to escape the effects of the global financial crisis and mining companies – one of South Africa’s key economic sectors – are laying off workers in response to falling commodity prices.”
Many are wondering how the economy of the nation is going to bounce back amidst the turmoil created in the wake of the changing financial climate, citing methods from attempting to solve the energy crisis to increasing tourism to revolutionizing small businesses. On August 17th, the African National Congress (ANC) backed a plan to split legislation governing the oil and gas industry from mining laws as the party begins a review of its policies in the effort to revamp its flailing economy.
“South Africa economy faces turbulence ahead: c.bank’s Kganyago.” Naija247News. Naija247News, 11 August 2015. Web. 17 August 2015.