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South Africa's decision to tap into its gold and foreign-exchange reserves to reduce debt levels may have negative consequences for the independence of the central bank, according to S&P Global Ratings. The country's Finance Minister plans to restructure a contingency account held at the South African Reserve Bank to free up $7.8 billion and alleviate borrowing costs. S&P warns that this move could politicize the central bank and prioritize fiscal needs over monetary and economic stability. The central bank has previously faced challenges in maintaining its independence, with calls to expand its mandate beyond price stability. [Extracted from the article]

South Africa's central bank is in discussions with the National Treasury to tap contingency reserves in order to fund the country's growing budget deficit. The central bank is working with outside advisers to determine the amount, timeline, and cost of the withdrawal. However, the issue is complicated as the profit on the reserves is on paper and selling part of the reserves could unsettle investors. The central bank oversees the Gold & Foreign Exchange Contingency Reserve Account on behalf of the Treasury, and there have been calls to use the account to avoid budget cuts. The Finance Minister has stated that tapping the reserves is being discussed with the central bank. [Extracted from the article]

The central bank has "a long track record of tolerating FX volatility" and inflation expectations are anchored, and therefore not highly sensitive to exchange rate fluctuations, the paper said. (Bloomberg) -- A change in the way South Africa's central bank implements monetary policy may lead to greater volatility in the rand. [Extracted from the article]

South Africa's derivatives market will begin using the central bank's new rand money-market benchmark, called Zaronia, to price short-term loans. This decision was made based on recommendations by the Financial Stability Board to use credit risk-free or nearly risk-free reference rates. Zaronia will be used in new contracts starting in the second half of this year, with plans to roll it out to cash markets next year. This move is part of global reform efforts to shift away from the London Interbank Offered Rate (LIBOR) following manipulation scandals. [Extracted from the article]

South Africa's National Treasury is considering withdrawing up to half of the 497 billion rand ($27.3 billion) contingency reserves held by the central bank to reduce the government's debt or fund public-sector wages. The Treasury and central bank are close to finalizing the terms of the draw-down from the Gold & Foreign Exchange Contingency Reserve Account. The withdrawal is being considered due to the strain on public finances caused by an energy shortage, logistics constraints, rising debt-service costs, and a growing civil-servant wage bill. However, concerns have been raised about the potential impact on the central bank's independence and the need for a longer-term solution. [Extracted from the article]

(Bloomberg) -- South Africa's central bank governor, Lesetja Kganyago, warned that there are still risks to inflation, even as he acknowledged that the rate has come down significantly. (All times are NY) Kganyago Says Job "Not Yet Done" to Defeat Inflation (11:20 a.m. NY) South Africa's central bank governor warned that there are still risks to inflation, even as he acknowledged that the rate has come down significantly. [Extracted from the article]

(Bloomberg) -- South Africa's central bank spent years investigating Markus Jooste, the former chief executive officer of scandal-hit retailer Steinhoff International Holdings NV, before moving to seize his assets last week for violating foreign exchange control rules. READ: Steinhoff Ex-CEO's Assets Frozen by South African Central Bank The Financial Action Task Force, which polices compliance with anti-money laundering and terror-financing measures, has warned that it could include the country on its so-called gray list in February unless it tightens up its controls. [Extracted from the article]

(Bloomberg) -- South Africa's central bank spent years investigating Markus Jooste, the former chief executive officer of scandal-hit retailer Steinhoff International Holdings NV, before moving to seize his assets last week for violating foreign exchange control rules. Numerous legal authorities, regulatory probes and lawsuits pointed to Jooste, 61, as the main architect of the accounting scandal that engulfed Steinhoff in late 2017, although he has yet to face criminal charges. [Extracted from the article]

(Bloomberg) -- South Africa's central bank spent years investigating Markus Jooste, the former chief executive officer of scandal-hit retailer Steinhoff International Holdings NV, before moving to seize his assets last week for violating foreign exchange control rules. Numerous legal authorities, regulatory probes and lawsuits pointed to Jooste, 61, as the main architect of the accounting scandal that engulfed Steinhoff in late 2017, although he has yet to face criminal charges. [Extracted from the article]

Strict new measures to curb the spread of coronavirus mayslow but won't derail South Africa's economic recovery,and the central bank will keep monetary policyaccommodative to support growth, Deputy Governor KubenNaidoo said. President Cyril Ramaphosa on Sunday moved the country onestep to alert level 4, the nation's second-highest,extending a curfew, reimposing a ban on the sale ofalcohol and outlawing sit-down meals at restaurants. [Extracted from the article]

Investigation turned into "attack on the Reserve Bank": lawyer "It is unclear on what possible basis the vulnerability of the Reserve Bank was relevant to the Public Protector's investigation into the CIEX report", he said. "The fact that this topic was even discussed with the State Security Agency indicates that the Public Protector's investigation was aimed at undermining the Reserve Bank". [Extracted from the article]