Foreign exchange responses to a central bank-filled week highlight their sensitivity to the interest rate differentials that are expected to prevail during the second half of the year. As always, the rand is particularly prone to these dynamics making its fortunes dependent on the SA Reserv.
China’s economy deteriorated on many fronts during April and it remains to be seen whether this will be a short-term, lockdown-related dynamic or whether longer-term forces are at play. It’s a keen reminder to South Africa – and the rest of the world – that policymakers would be well ad.
The upheaval in Eastern Europe has upended everything, with South Africans, who are still recovering from two years of Covid-19 lockdowns, now facing the prospect of food price hikes and even higher fuel prices.
Threats of war over Ukraine with China and Russia making an unexpected pact to stand together has seen oil prices head for $100 a barrel again and intensified concerns about Europe’s gas future. Is this a turning point in the global order and something we need to worry about?
One day we’ll look back on this time and wonder how we could have survived so many unprecedented black swan events. We might even see how these were the economic transitions we needed to make from a world that no longer exists. The thing to remember is that black swan events can be positive,.