South African Rand Stable against USD

Early on Thursday, the U.S Federal reserves outlook on their positive economic growth saw them pledge to keep interest rates at low rates near zero mark. The Federation said on Wednesday that they expect the U.S Economy is heading for its strongest growth in nearly 40 years and with regards to policymakers will keep interest rates low concerning the emerging markets and the economic strain some may be facing due to the Covid-19 pandemic such as an emerging market such as South Africa.

With regards to the news, the ZAR has still seen it fall by a mere few cents from the previous week opening at a level of 14.89150 on 15th March 2021 and will have fallen between -2.10% & -2.50% from the beginning of the week.

South Africa is also in the process of drawing up a plan to ensure that if a South African Bank were to fail and become bankrupt the damages would be minimized as a major bank failure will cause a devastating effect and cause major problems for the South African economic system. The Financial Sector Laws Amendment Bill is aiming to address the misusing of public funds and reducing moral hazards in the country. The bill was handed into parliaments standing committee of finance on Tuesday (16th March) by Momoniat. They have also created a deposit insurance scheme to ensure the following.

● Eliminate the risk of depositors losing funds that deprive them of their livelihood

● Promotes the competition between the banks in the country more especially of the smaller banks

● Reducing the risk of a bank run during a crisis and increasing the confidence of the set bank

● Enhances South Africas market security and integrity, which improves the confidence of an investor for the country

The Standing Committee of Finance will process the bill and will call upon the public to submit comments and holding public hearings to deliberate on the bill and the clause-by-clause to adopt a report by the community to be tabled at the National Assembly.