South African central bank cuts key rate with inflation well-contained
PRETORIA, May 29 (Reuters) - South Africa's central bank cut its main interest rate by 25 basis points to 7.25% on Thursday, after inflation came in below its target range for a second consecutive month.
The decision by the central bank's Monetary Policy Committee (MPC) was split, with five members preferring 25 basis point reduction and one favouring a 50 basis point cut.
Economists polled by Reuters had predicted a close call, as the bank's MPC is known for its cautious approach.
Price pressures are well under control in Africa's biggest economy, with headline consumer inflation (ZACPIY=ECI), opens new tab at 2.8% year on year in April, undershooting the central bank's target range of 3% to 6%.
The South African Reserve Bank maintained its policy rate at 7.50% at its last meeting in March, citing risks from U.S. President Donald Trump's global trade war and uncertainty surrounding the country's budget.
Those concerns have since partially eased, with Trump suspending his so-called reciprocal tariffs against South Africa and other countries and the local ruling coalition finding common ground on the budget.
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BBC News
31 minutes ago
- BBC News
South Africa's land law explained – and why it so inflames Donald Trump
South Africa's President Cyril Ramaphosa is at the centre of a political firestorm after he approved a law that gives the state the power to expropriate some privately owned land without compensation for law, which is yet to be implemented, has drawn the ire of US President Donald Trump, who sees it as discriminating against white farmers. Centre-right political parties and lobby groups in South Africa have also opposed it, saying they will challenge the Expropriation Act – as the law is named – in court on the grounds that it threatens property government says the law provides for compensation to be paid in the vast majority of cases – and the changes are needed to increase black ownership of private farmland is still owned by white people. When Nelson Mandela came to power more than 30 years ago, ending the racist system of apartheid, it was promised that this would be rectified through a willing-buyer, willing-seller land reform programme – but critics say this has proved too slow and too costly. So what exactly can be expropriated without compensation? In rare circumstances it would be land that was needed for the "public interest", legal experts told the to South African law firm Werksmans Attorneys, this suggested it would mainly, or perhaps only, happen in relation to the land reform it could also be used to access natural resources such as minerals and water, the firm added, in an opinion written by its experts in the field, Bulelwa Mabasa and Thomas and Karberg told the BBC that in their view, productive agricultural land could not be expropriated without said any expropriation without compensation – known as EWC – could take place only in a few circumstances:For example, when an owner was not using the land and was holding it for "speculative purposes"Or when an owner "abandoned the land by failing to exercise control over it despite being reasonably capable of doing so". Owners would probably still get compensation for the buildings on the land and for the natural resources, the lawyers and Karberg added that EWC was "not aimed at rural land or farmland specifically, and could include land in urban areas".However, in cases where compensation is paid, the rules are set to change, with owners likely to get less money. Why will less money be paid in compensation? The plan is for owners to receive "just-and-equitable" compensation – a departure from the higher "market value" they have been getting up to now, Mabasa and Karberg government had been paying market-value compensation despite the fact that this was "at odds" with the constitution, adopted after white-minority rule ended in 1994, they lawyers said that all expropriations had "extensive procedural fairness requirements", including the owner's right to go to court if they were not move away from market-value compensation will also apply to land expropriated for a "public purpose" – like building state schools or has not been a major point of controversy, possibly because it is "hardly a novel concept" – a point made by JURISTnews, a legal website run by law students from around the world. "The US Constitution, for instance, provides that the government can seize private property for public use so long as 'just compensation' is provided," it added. Will it make it easier for the government to acquire land? The government hopes so. University of Western Cape land expert Prof Ruth Hall told the BBC that more than 80,000 land claims remain the eastern regions of South Africa, many black people work on farms for free – in exchange they are allowed to live there and keep their livestock on a portion of the owners' land, she government wants to transfer ownership of this land to the workers, and it was "unfair" to expect it to pay the market value, Prof Hall the last three decades, the government has used existing powers to expropriate property–- with less than market-value compensation – in fewer than 20 cases, she new law was aimed at making it easier and cheaper to restore land to black people who were "dispossessed" of it during white-minority rule or were forced to be "long-term tenants" as they could not own land, Prof Hall added."It's a bargaining chip," she said. But she doubts that the government will press ahead with implementing the law in the foreseeable future as the "political cost" has become too high. The academic was referring to the fact that Trump has opposed the law, saying it discriminates against white farmers and their land was being "seized" – a charge the government February, Trump cut aid to South Africa, and in April he announced a 30% tariff on South African goods and agricultural products, although this was later paused for 90 was followed by last month's infamous Oval Office showdown when Trump ambushed Ramaphosa with a video and printouts of stories alleging white people were being persecuted – much of his dossier has been Trump's Oval Office confrontation with Ramaphosa What has been the reaction in South Africa? Like Trump, the second-biggest party in Ramaphosa's coalition government, the Democratic Alliance (DA), is opposed to the legislation. In a statement on 26 May, the party said that its top leadership body had rejected the notion of "nil compensation". However, it has agreed with the concept of just-and-equitable compensation rather than market-value compensation, adding it should be "adjudicated by a court of law".Surprisingly, Jaco Kleynhans of the Solidarity Movement, an influential Afrikaner lobby group, said that while the new law could "destroy" some businesses and he was opposed to it, he did not believe it would lead to the "large-scale expropriation of farmland"."I don't see within the wording of this text that that will happen," he said in a recent panel discussion at an agricultural exhibition held in South Africa's Free State province – where a large number of conservative Afrikaner farmers South African Property Owners Association said it was "irrational" to give "nil compensation" to an owner who held land for speculative purposes. "There are many landowners whose sole purpose of business is to speculate in land. They do not get the land for free and they have significant holding costs," the association said, adding it had no doubt the law would be "abundantly tested" in the courts. Mabasa and Karberg said one view was that the concept of EWC was a "legal absurdity" because "intrinsic in the legal definition of expropriation, is a requirement for compensation to be paid".However, the lawyers pointed out the alternative view was that South Africa's constitution "implicitly recognises that it would in some circumstances be just and equitable for compensation to be nil". What does the government say? South Africa's Public Works Minister Dean Macpherson has defended the legislation, breaking ranks with his party, the fact he is in charge of the new legalisation and, on a discussion panel, he explained that while he had some concerns about the law, it was a "dramatic improvement" on the previous Expropriation Act, with greater safeguards for land-owners. He said the law could also help end extortionist demands on the state, and in some cases "nil compensation" could be gave as an example the problems being faced by the state-owned power utility plans to roll out a transmission network over about 4,500km (28,000 miles) of land to boost electricity supplies to end the power crisis in the of the roll-out, some individuals colluded with Eskom officials to buy land for 1m rand ($56,000; £41,000), and then demanded R20m for it, he said. "Is it just and equitable to give them what they want? I don't think that's in the interest of the broader community or the state," Macpherson another example, Macpherson said that some of South Africa's inner cities were in a "disastrous" condition. After owners left, buildings were "over-run" and "hijacked" for illegal occupation. The cost to the state to rebuild them could exceed their value, and in such cases the courts could rule that an owner qualified for "nil compensation", he said. "Nil is a form of compensation," Macpherson added, while ruling it out for mayor Dada Morero told South Africa's Mail & Guardian newspaper that he wanted to use the buildings for the "public good", like accommodating around 300,000 people on the housing waiting added the owners of nearly 100 buildings could not be located. "They have abandoned the buildings," he said, adding some of the owners were from the UK and Mabasa and Karberg told the BBC that in such cases compensation would probably still have to be paid for the buildings, though not the the state could not locate the owners, it "must deposit the compensation with the Master of the High Court" in case they returned or could be traced later, they said. What next? The law is in limbo, as Ramaphosa – about four months after giving his assent to it – has still not set a date for its implementation. Nor is he likely to do so anytime soon, as he would not want to further antagonise Trump while South Africa was trying to negotiate a trade deal with the US. And on the domestic front, the DA is spearheading opposition to the legislation. It said it wanted a "judicial review" of it, while at the same time it was pressing ahead with court action to challenge the law's constitutionality. The DA's tough line is in contrast with that of Macpherson, who, a few weeks ago, warned that if the law was struck down in its entirety: "I don't know what's going to come after that."In politics, sometimes you must be careful what you wish for because often you can get it," he comments highlight the deep fissures in South African politics, with some parties, such as Julius Malema's Economic Freedom Fighters (EFF), believing that the legislation did not go far enough to tackle racial inequality in land land such an emotive issue, there is no easy solution to the dispute – and it is likely to continue to cause tensions within South Africa, as well as with the US president. You may also be interested in: Rebuked by Trump but praised at home: How Ramaphosa might gain from US showdownIs there a genocide of white South Africans as Trump claims?South Africans' anger over land set to explode Go to for more news from the African us on Twitter @BBCAfrica, on Facebook at BBC Africa or on Instagram at bbcafrica
The Guardian
44 minutes ago
- The Guardian
Trump news at a glance: veterans affairs department muzzled after critical article
Senior officials at the US Department of Veterans Affairs have ordered VA physicians and scientists not to publish in medical journals or speak with the public without first seeking clearance from political appointees of Donald Trump. Veterans advocates say the decision fits into a pattern of censorship by the Trump administration, and came hours after the prestigious New England Journal of Medicine published a perspective co-authored by two pulmonologists who work for the VA in Texas. The article warned that cancelled contracts, layoffs and a planned staff reduction of 80,000 employees in the nation's largest integrated healthcare system jeopardizes the health of a million veterans who served in Vietnam, Iraq and Afghanistan. Here are the key stories at a glance: The edict, laid down in emails on Friday by Curt Cashour, the VA's assistant secretary for public and intergovernmental affairs, and John Bartrum, a senior adviser to VA secretary Doug Collins, came hours after the article published in the New England Journal of Medicine. 'We have guidance for this,' wrote Cashour, a former Republican congressional aide and campaign consultant, attaching the journal article. 'These people did not follow it.' Read the full story Russell Vought, the director of the office of management and budget (OMB), on Sunday cast doubt on the constitutional obligation of the White House to ask Congress to sign off on Donald Trump's massive cuts to the federal workforce spearheaded by Elon Musk. Vought indicated the White House preferred to rely on 'executive tools' for all but a 'necessary' fraction of the cuts instead of submitting the whole package of jobs and agency slashing that took place via the so-called 'department of government efficiency' (Doge), to the congressional branch for its official approval. Read the full story The US Department of Homeland Security (DHS) removed a list of 'sanctuary' states, cities and counties from its website following sharp criticism from a sheriffs' association that said a list of 'noncompliant' sheriffs could severely damage the relationship between the Trump administration and law enforcement. Read the full story A teenage transgender athlete in California, who has been at the center of widespread political attacks by rightwing pundits and the Trump administration, won in two track events over the weekend. The 16-year-old athlete, AB Hernandez, tied for first place alongside two other athletes in the high jump, and tied for first place in the triple jump. This comes as the Trump administration threatened to withhold federal funding from California for allowing trans athletes to compete in girls' sports. Read the full story The White House budget director Russ Vought on Sunday dismissed as 'totally ridiculous' fears expressed by voters that cuts to benefits in the huge spending bill passed by the House will lead to premature deaths in America. Donald Trump's One Big Beautiful Bill Act, now awaiting debate in the US Senate, will slash two major federal safety net programs, Medicaid, which provides healthcare to poor and disabled Americans, and the Supplemental Nutrition Assistance Program (Snap), which helps people afford groceries, which will affect millions of people if it becomes law. Read the full story The is FBI investigating a multiple-injury attack in downtown Boulder, Colorado. One person died and 11 other were injured after 80 shots fired at North Carolina house party. A British businessman was accused of plotting to smuggle US military technology to China. Catching up? Here's what happened on Saturday 31 May.
Reuters
an hour ago
- Reuters
S.Korea factory activity shrinks again, new orders suffer steepest slump in 5 yrs, PMI shows
SEOUL, June 2 (Reuters) - South Korea's factory activity shrank for a fourth month in May as frail domestic demand and the impact of U.S. tariffs took a heavy toll on factory output while overall orders plunged at their steepest pace in five years, a business survey showed on Monday. The Purchasing Managers Index (PMI) for manufacturers in Asia's fourth-largest economy, released by S&P Global, edged up to 47.7 in May, from 47.5 in April. The index has stayed below 50-mark, which separates expansion from contraction, since February. "South Korea's manufacturing sector came into May on an unstable footing," said Usamah Bhatti, economist at S&P Global Market Intelligence. "Firms often mentioned that the contraction was attributed to a continuing stagnation in the domestic economy, as well the continued impact of higher U.S. tariffs on the home market as well as on key export markets." New orders suffered their steepest contraction since June 2020 while output fell at the quickest rate in just over two-and-a-half years. U.S. President Donald Trump's global trade war has added to already weak demand conditions in South Korea, which recently suffered its worst wildfires on record and has faced political turmoil. The trade-reliant economy unexpectedly contracted in the first quarter, raising pressure on policymakers to shore up demand. The Bank of Korea on Thursday cut rates for the fourth time in its current easing cycle and almost halved this year's economic outlook to 0.8%, just days ahead of a presidential election slated for June 3, citing downside risks from U.S. tariff policy as well as a sluggish construction sector. The PMI survey also showed a fall in backlogs of work for the second month, with the most pronounced depletion in nearly five years in the face of subdued new orders. On a brighter note, manufacturers turned optimistic, reversing the brief spell of negative sentiment in April, partly led by hopes of an easing in global trade tensions. However, the degree of confidence was modest and reflected persistent concerns over the impact of tariffs.
