South African Reserve Bank

The MPC decided to reduce the policy rate by 25 basis points, to 7.75%, with effect from 22 November 2024. The decision was unanimous.

Title: Joint estimation of liquidity and credit risk premia in bond prices with an application Authors: Jens H. E. Christensen and Daan Steenkamp For the full paper, click here: https://bit.ly/3WecZkI Synopsis: This paper introduces a novel arbitrage-free dynamic term structure model that jointly accounts for liquidity and credit risk premia in panels of bond prices. While liquidity risk is bond-specific, credit risk is common across bonds and follows a square-root process to ensure nonnegativity and econometric identification. A simulation study confirms the separate identification of liquidity and credit risk. We apply the model to South African government bond prices and document the existence of large and weakly correlated liquidity and credit risk premia. This underscores that liquidity and credit stresses are distinct risks to bond investors. (The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the South African Reserve Bank or South African Reserve Bank policy.

Chart of the week on the global agricultural commodity price index: US dollar versus rand

Here are the 2025 Monetary Policy Committee (MPC) press briefing dates. The MPC meets six times a year to decide on the policy rate, focusing on keeping inflation within the 3–6% target range. 🔗 For more information, visit www.resbank.co.za #SARB #MPC2025

Did you know that the Corporation for Deposit Insurance (#CODI) automatically covers your qualifying deposits by up to R100 000 per deposit per bank? This means CODI fully protects 9 out of 10 people in the unlikely event of their bank failing. #FinancialSafetyNet.

South Africa now has a deposit insurance scheme, protecting depositor’s savings in qualifying products, further enhancing the country’s financial stability. A deposit insurance provides a pre-planned, orderly, and reasonable access to deposits should a bank fail. Depositors will know when and how to access their money. Before the introduction of CODI, government was forced to use tax-payer’s money to bail compensate depositors or bail out a bank. Ask your bank for qualifying products or visit www.resbank.co.za/CODI #CorporationforDepositInsurance #CODI #FinancialSafetyNet

Did you know that your banknotes and coin retain their face value irrespective of their date of issue? The South African Reserve Bank does not buy back old notes and coin. #Knowyourmoney

Chart of the week on contributions to retail trade sales

The South African Reserve Bank has released its December 2024 Quarterly Bulletin (QB), providing an overview of domestic economic developments for the third quarter. It also includes a comprehensive set of macroeconomic statistical tables. You can find the full December 2024 QB 👉🏿: https://bit.ly/41sBHBh or download the #SARB mobile App 👉🏿: bit.ly/3XIx968 to access current and historical QB publications. #SARBQB #Economy

#G20SouthAfrica | Minister of Finance, Mr Enoch Godongwana delivered opening remarks at the Finance and Central Banks Deputies' Meeting earlier today. #G20SouthAfrica #BetterAfricaBetterWorld #ReKaofela