South Africa recorded a second consecutive monthly trade surplus in June as exports of vegetable products climbed, while oil imports also rose. The surplus reached 12.5 billion rand ($880 million) last month compared with a deficit of 22.95 billion rand in the same period last year. These latest trends could help support the rand and reduce the chances of higher interest rates.
Despite this, the JSE ASI lost 0.39%. The news that the Fed did not increase interest rates was supportive for the local market as seen through the firmer rand at R14.17 to a dollar. Consequently, stocks fell as demand for resource stocks and firms that depend largely on foreign earnings plunged on the stronger rand. Moreover, news that the South African economy lost another 129 000 jobs in the second quarter did not help much.
The NGSE ASI gained 1.27%. Nigeria’s central bank raised its benchmark interest rate by a surprise 200 basis points to 14 percent on Tuesday and maintained its existing cash reserve ratios for commercial banks in an attempt to stabilise the naira.
Kenya passed a bill to limit how much interest commercial banks can charge on loans with a view to decrease credit costs in the country. The suggested revision pegs commercial rates at 4 percentage points above the benchmark Central Bank Rate (CBR) and sets interest granted on deposits at a minimum 70 percent of the CBR. The CBR was kept at 10.5% at a Monetary Policy Committee meeting on Monday. The NSE ASI climbed 2.79% as a result of the welcoming news for investors.
Egypt's Monetary Policy Committee (MPC) decided to keep interest rates unchanged. Thus, the country's overnight deposit rate, overnight lending rate, and the rate of the Central Bank of Egypt's main operation remain at 11.75%, 12.75 %, and 12.25%, respectively. This may be a way to avoid raising the government's debt service and budget deficit. The EGX30 rose by 7.99% this week; the highest upward weekly performance in more than four months since mid-March.
As for me, unlike on markets, it is vacation time, will be back in September!
