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South Africa to withdraw from emergency reserves to reduce growing debt

Published

10 months ago

February 21, 2024

South Africa’s National Treasury announced on Wednesday that the government would take $8 billion over the following three years from emergency reserves kept at the central bank in order to curb the country’s growing debt.

The most industrialised economy in Africa has not expanded significantly in over ten years, as the state budget has been increasingly consumed by escalating debt servicing expenses.

Finance Minister Enoch Godongwana stated during the presentation of the 2024 budget that the unconventional decision to remove 150 billion rand ($7.93 billion) from the Gold and Foreign Exchange Contingency Reserve Account (GFECRA) would not jeopardise the solvency of the central bank and would instead leave ample reserves to withstand shocks to the currency rate.

The Treasury stated that GFECRA, which records gains and losses on the nation’s foreign exchange reserve operations, has a balance of more than 500 billion rand, which is greater than likely reserve losses due to rand appreciation.

The next fiscal year, which ends in March 2025, will give the government 100 billion rand; the next two years, it will receive 25 billion rand each.

Duncan Pieterse, the director general of Treasury, informed reporters that the government was essentially substituting more costly borrowing with the reserve account.

Investor confidence regarding the government’s financial needs led to a minor increase in the rand and a strengthening of the nation’s sovereign dollar bonds.

A general election scheduled for May 29th is approaching, and given the dire state of the economy, it is possible that the ruling African National Congress party may lose its legislative majority for the first time since apartheid ended thirty years ago.

Related Topics:Emergency reserve Featured South Africa

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Mozambique drops interest rate for 6th time in 2024

Published

6 days ago

November 29, 2024

Ifeoluwa Dada

As inflation remains low in southern African Mozambique, its central bank has lowered its main interest rate by 75 basis points, the sixth straight drop.

Mozambique’s MIMO interest rate dropped from 13.50% to 12.75%. Since July, Mozambique’s inflation rate has stayed below 3%; in October, it was 2.68% annually.

In a statement, the Bank of Mozambique stated that, despite concerns about post-election demonstrations and their effect on the cost of goods and services, its most recent monetary policy decision was consistent with maintaining inflation in the single digits over the medium run.

With a moderate inflation forecast, the policy rate was lowered for the sixth straight time.

Despite concerns about post-election demonstrations and their effect on the cost of goods and services, policymakers said the decision was compatible with keeping inflation in the single digits in the medium run.

Although headline inflation increased slightly to 2.68% in October from 2.45% in July, it has stayed below 3% since then. Banco de Moçambique is the source.

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Hackers stole $17 million from Uganda National Bank— Report

Published

7 days ago

November 28, 2024

Ifeoluwa Dada

The state-owned New Vision newspaper has reported that offshore hackers had stolen 62 billion Ugandan shillings ($16.8 million) from Uganda’s central bank.

Earlier this month, the hackers, who went by the name “Waste,” allegedly gained access to the Bank of Uganda’s IT systems and moved the money illegally.

According to New Vision, which cited anonymous bank sources, the Southeast Asian hacker collective moved a portion of the pilfered funds to Japan.

A request for comment on the issue from Reuters was not immediately answered by Bank of Uganda. A request for a response from the Ugandan police was likewise not answered.

More than half of the funds had been successfully retrieved by the central bank from the hackers, according to New Vision. It stated that President Yoweri Museveni had ordered a probe into the cyberattack.

Separately, the Daily Monitor, Uganda’s largest independent daily, stated that insider collaboration could have played a role in the crime.

In Uganda, there have been several instances of cyber thefts from banks and other financial service providers, including telecom companies. However, according to police authorities, several banks are reluctant to openly admit such events for fear of upsetting their clientele.