Banks

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Currencies

China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

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Capital Markets

Mnuchin expected to be Trump’s Treasury secretary

Donald Trump has chosen Steven Mnuchin as his Treasury secretary, US media outlets reported on Tuesday, positioning the former Goldman Sachs banker to be the latest Wall Street veteran to receive a top administration post. Mr Mnuchin chairs both Dune Capital Management and Dune Entertainment Partners and has been a longtime business associate of Mr […]

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Banks

Financial system more vulnerable after Trump victory, says BoE

The US election outcome has “reinforced existing vulnerabilities” in the financial system, the Bank of England has warned, adding that the outlook for financial stability in the UK remains challenging. The BoE said on Wednesday that vulnerabilities that were already considered “elevated” have worsened since its last report on financial stability in July, in the […]

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Currencies

China stock market unfazed by falling renminbi

China’s renminbi slump has companies and individuals alike scrambling to move capital overseas, but it has not damped the enthusiasm of China’s equity investors. The Shanghai Composite, which tracks stocks on the mainland’s biggest exchange, has been gradually rising since May. That is the opposite of what happened in August 2015 after China’s surprise renminbi […]

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Categorized | Currencies

Rand climbs after government cuts spending plans


Posted on November 22, 2016

The rand is rallying for the second day in a row after South Africa’s energy ministry unexpectedly deferred spending plans ahead of a series of key credit ratings decisions in the coming weeks.

At publication time, the currency is up 1.5 per cent for the day and 3 per cent for the week to 14.04 per dollar.

The government announced this morning that its first new nuclear power plants will not come on stream until 2037, instead of 2023 as previously planned.

South African president Jacob Zuma has encouraged the new nuclear programme, but the Treasury has warned of the dangers of “over-investment” as economic growth in the country stutters.

The decision also comes less than a fortnight after the head of state energy group Eskom resigned in connection with a report into alleged graft and cronyism at many of South Africa’s key institutions.

Finance minister Pravin Gordhan, whom prosecutors recently attempted to charge with fraud in a battle that was widely seen as politically motivated, has been working to shore up confidence in the economy ahead of a series of ratings decisions that could see the government’s sovereign debt downgraded to junk status.

S&P, Moody’s and Fitch are all due to review the country’s credit rating before the end of the year, with S&P’s decision due on December 2.

Chart: Bloomberg