Thursday, February 5, 2009
From Creamer Media in Johannesburg, I'm Amy Witherden.
Making headlines:
Ahead of the eagerly awaited interest rate announcement by the South African Reserve Bank later today, Rand Merchant Bank strategists say that the size of the expected rate cut will make no difference to the strength of the local currency.
RMB's John Cairns says that whether South African rates sit at 10,5% or 11%, it will make little difference to speculators while the rest of the world heads towards-zero interest rates. He states that the importance lies in the signal that today's decision will send.
The RMB strategist explains that the rand needs interest rates that are consistent with the contraction in the current account deficit.
A 50 basis point cut would disappoint expectations and push the entire rates curve up. Cairns says that even if the Monetary Policy Committee cuts rates by 100 basis points, he cannot see the Reserve Bank signalling a more aggressive rate cutting cycle than the market is already discounting.

In other news, Zimbabwe's Parliament has delayed debate on constitutional changes to create a unity government. This represents another setback that could further prolong the country's political and economic crisis.
Zimbabwe's Parliament was expected to start debating the new constitutional Bill to create a Prime Minister post for Morgan Tsvangirai this week. This was put on hold after a fresh dispute erupted, with the opposition Movement for Democratic Change accusing President Robert Mugabe's Zanu-PF of backtracking on the unity deal.
Justice Minister Patrick Chinamasa says that the deadline for passing constitution amendment 19 into law will not be met, because negotiators are still meeting with the Southern African Development Community facilitation team in South Africa.

Back home, after a Pietermaritzburg High Court judge yesterday postponed Jacob Zuma's corruption hearing to August 25, the African National Congress Presidential candidate said that he refuses to step down. He said that his ongoing prosecution was aimed at ‘demonising' him, and his stepping down would be tantamount to admitting guilt.
Political analysts have expressed concern that the man likely to be elected President in the upcoming elections will be the subject of at least two major court cases. This would have a negative impact on the moral content of society, as a President is meant to embody national values.
Meanwhile, the ANC Youth League lashed out at the National Prosecuting Authority, asking why it would want to prosecute South Africa's next President, and embarrass the country.
The ANC reiterates that it is not in the public interest for Zuma's prosecution to proceed.

Also making headlines:
The United Nations denies that its peacekeepers failed Congo civilians in the recent unrest in that area.
New African Union chairperson Muammar Gaddafi hails progress towards an African unity government.
And, South African President Kgalema Motlanthe chastises Deputy Foreign Minister Fatima Hajaig for her anti semitic comments.

That's a roundup of news making headlines today. For more on these and other stories, visit polity.org.za.