FormyJob
No Result
View All Result
  • Home
  • Banking
  • Investing
  • Insurance
  • Retirement
  • Taxes
  • Home
  • Banking
  • Investing
  • Insurance
  • Retirement
  • Taxes
No Result
View All Result
FormyJob
No Result
View All Result

South Africa offers Turkey a lesson on inflation

formyjob by formyjob
April 2, 2021
in Banking, Insurance, Taxes
0 0
0
South Africa offers Turkey a lesson on inflation
0
SHARES
6
VIEWS
Share on FacebookShare on Twitter

South African central bank chief Lesetja Kganyago owes Tayyip Erdogan one. By firing his head of monetary policy, the Turkish president caused a currency and bond crash. It’s a dramatic reminder to Kganyago’s political bosses of what could go wrong if they started meddling in rate politics.

Erdogan’s view that high rates cause prices to rise contrasts with Pretoria’s orthodoxy

The Turkish economy is twice that of South Africa and has a more developed manufacturing sector. They coincide in the high volume of trading of their currencies and in their great needs for external financing, which makes them vulnerable to faltering in investor confidence. When one receives a blow, the other suffers a bruise. For example, in August 2018, when the rand fell 15% in two days in reaction to another Erdogan-inspired crash in the lira.

But the ties have been loosened. Last Monday, the rand even won as the lira plummeted. The main reason is inflation. Erdogan’s view that high rates cause, rather than prevent, price rises contrasts with Pretoria’s orthodox view and its adherence to a 3% -6% target. And while the Turkish leader has gone through four central bank heads in two years, Kganyago is only South Africa’s fourth since apartheid ended in 1994.

South Africa has reaped the benefits of falling inflation. From just 3.2% in January, it allows Kganyago to maintain a flexible policy to boost the recovery, even though it may not appeal to return-hungry foreign investors who own a third of the country’s debt. Few emerging can afford it.

It does not mean that he is safe. Its economy is in the doldrums, this year’s deficit will be 14% of GDP and the agencies have reduced their credit to garbage. Its yield curve also points to long-term concerns about the government’s ability to pay: in 2024, debt service costs will consume 16% of public spending. Politicians also attack the central bank when it suits them. Thanks to Erdogan, Kganyago’s reply will be even stronger.

Previous Post

Goirigolzarri triples his salary as Chairman of CaixaBank to 1.65 million

Next Post

Biden on a tax crusade to fund infrastructure projects

Next Post
Biden on a tax crusade to fund infrastructure projects

Biden on a tax crusade to fund infrastructure projects

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

No Result
View All Result

Recent Posts

  • How to set up call of duty mobile two-factor authentication?
  • Samsung S95BA OLED Review
  • OnePlus 8T review
  • Notepad T 10s Review
  • What is a lot in cryptocurrency trading?

Recent Comments

    Archives

    • October 2022
    • May 2022
    • November 2021
    • October 2021
    • September 2021
    • May 2021
    • April 2021
    • March 2021

    Meta

    • Log in
    • Entries feed
    • Comments feed
    • WordPress.org
    FormyJob

    We bring you the best Premium WordPress Themes that perfect for news, magazine, personal blog, etc. Check our landing page for details.

    Categories

    • Banking
    • gaming
    • Insurance
    • Investing
    • Retirement
    • Review
    • Services
    • software
    • sports
    • Taxes
    • Uncategorized

    Follow us on social media

    Recent News

    • How to set up call of duty mobile two-factor authentication?
    • Samsung S95BA OLED Review
    • OnePlus 8T review
    • Home
    • Banking
    • Investing
    • Insurance
    • Retirement
    • Taxes

    © 2023 JNews - Premium WordPress news & magazine theme by Jegtheme.

    No Result
    View All Result
    • blog
    • Home
    • Privacy Policy

    © 2023 JNews - Premium WordPress news & magazine theme by Jegtheme.

    Welcome Back!

    Login to your account below

    Forgotten Password?

    Create New Account!

    Fill the forms below to register

    All fields are required. Log In

    Retrieve your password

    Please enter your username or email address to reset your password.

    Log In