Repo rate going up, but so is economic activity

A GAUGE measuring economic activity rose for a fourth month in April even as record-high commodity prices peaked and the worst flooding in almost three decades left more than 400 people dead, damaged businesses and halted operations at SA’s biggest port. The BankservAfrica

Economic Transactions Index, which measures EFT-originated transactions, rose to 136.1 from a revised 135.2 in March, the automated clearing house said.

AFRICA’S largest mobile operator, MTN, said robust demand for data helped group core profit grow more than a fifth in the first quarter to end-March, also reporting strong subscriber growth momentum in Nigeria, its biggest market, despite new SIM registration rules. Core profit was up 21.1% year on year, with data revenue up more than a third.

FOREIGN exchange reserves rose to a record high of $60.28bn in April from $58.16bn in March. The Reserve Bank said the rise was mainly due to the proceeds received from foreign borrowings amounting to $3bn.

THE Reserve Bank is set to make its first 50 basis point hike to its repo rate in more than six years this week, taking it to 4.75%, to prevent potential second-round effects from higher consumer prices, a Reuters poll forecast. Despite a cost-of-living crisis expected to have a severe impact on growth, 16 of 24 economists in the survey concluded it would raise its repo rate by 50 basis points on Thursday.

SA is scaling back its Covid-19 vaccination drive and may have to destroy doses because of a lack of demand even as the country heads into a fifth wave of infections. Take-up has slowed to the point where keeping some sites running is unaffordable, said Nicholas Crisp, deputy director-general at the department of health, who is in charge of the programme.

ESKOM said the power outlook remained highly uncertain, with unplanned outages often varying by 2,000MW in one week.

— BusinessLIVE, Reuters and Bloomberg