Here’s what is happening in and affecting South Africa today:
Coronavirus: Global Covid-19 infections have hit 15 million cases, with the death toll now over 616,000. In South Africa, cases are fast approaching the 400,000 mark, currently at 394,948, with deaths rising to 5,940 after seeing 572 new casualties overnight. Recoveries are now at 229,175, leaving a balance of 159,833 active cases.
- Rates: The South African Reserve Bank’s Monetary Policy Committee will announce its rates decision this afternoon, with economists and analyst split on where things will fall. Predictions cover a wide range of anywhere from a hold at 3.75%, to a cut of 100 basis points to 2.75%. Most economists believe the SARB will take a cautious approach and go for a 25 basis point cut to 3.5%, leaving room for another possible cut later in the year. Rates have been cut by a cumulative 275 basis points so far this year. [EWN, BusinessTech]
- School closure: The National Coronavirus Command Council will reportedly advise cabinet to shut schools down for three weeks, according to TimesLive, citing “impeccable sources”. The paper said that those in attendance to a meeting held with deputy minister of basic education Reginah Mhaule on Wednesday night were made aware of the decision. The recommendation will reportedly be tabled today, with an announcement to follow. Under these terms, schools would be shut, only to return on 17 August. [TimesLive]
- Legal challenge: Government is facing yet another legal challenge related to its lockdown regulations, but the first one stemming from the alcohol industry. Around 120 wine farmers have filed court papers challenging the latest reintroduction of the alcohol sales ban, on the basis that it is irrational, arbitrary and unreasonable. The farmers say jobs and livelihoods are being lost because they are unable to do wine tastings, or to operate their on-site restaurants at full capacity. [Moneyweb]
- New loan: The African Development Bank has approved a roughly R5 billion loan to the South African government to help it fight the Covid-19 pandemic and support its budget. The bank said that the loan was to protect lives and promote access to essential medical equipment, to protect livelihoods by preserving jobs, and to support companies in the formal and informal economy. South Africa’s economy was in recession even before the Covid-19 crisis hit, with current projections putting annual GDP decline between 7% and 11%. [Reuters]
- Markets: Additional global Covid-19-related stimulus has seen the rand continue to maintain a solid footing, even as Sino-US tensions escalate. Locally, it’s expected that SARB will cut interest rates by another 25bps in an effort to support the ailing economy, while the US will release initial jobless claims this afternoon. The rand traded to a high of R16.35 in the overnight session, but failed to sustain those levels. On Thursday the rand is at R16.47 to the dollar, R19.06 to th euro and R20.98 to the pound. Commentary by Peregrine Treasury Solutions. [XE]