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By the close of trade on Tuesday , the South African rand weakened against the US dollar.
- The South African President, Cyril Ramaphosa, unveiled a R500.00bn economic recovery stimulus package that will form part of the national response to support South Africans dealing with the consequences of the COVID-19 pandemic. This equates to (10% of GDP) for those on social grants as the government tries to alleviate the pressure of the lockdown on those most vulnerable. [See summary at the end].
- In the US, existing home sales dropped by the most in nearly 4.5 years in March, as extraordinary measures to control the spread of the novel coronavirus brought buyer traffic to a virtual standstill.
- The US Senate passed a $484.00bn package to bolster small businesses and hospitals ravaged by the coronavirus pandemic and expand testing for COVID-19.
- Oil ministers from the OPEC+ coalition held an unscheduled conference call on Tuesday to discuss the collapse in crude prices, though a closing statement signaled they didn’t settle on any new policy measures. Alarmed by the market’s unrelenting plunge, despite their announcement of record production cuts earlier this month, several producers held informal talks “to brainstorm the current dramatic oil market situation. The dollar and yen held broad gains early Wednesday, as a bounce in oil prices failed to calm market nerves, with the week’s rout and frail fuel demand underlining a grim outlook for the global economy.
- The yield on benchmark government bonds ended mixed yesterday. The yield on 2021 bond declined to 4.21% while that for the longer-dated 2030 issue rose to 10.33%.
In early trade on Wednesday, the US dollar is trading marginally lower against the South African rand at R18.9701, while the euro is trading 0.1% lower at R20.5884. The British pound has declined 0.1% against the South African rand to trade at R23.3198.
By the close of trade on Tuesday, the euro advanced against most of the major currencies.
- The German ZEW economic sentiment index surprisingly rebounded in April.
- However, the current situation index sharply deteriorated during the same month.
- The eurozone’s economic sentiment index swung into positive territory in April, after experiencing a big drop in March due to the coronavirus pandemic.
In early trade on Wednesday, the euro has marginally slipped against the US dollar to trade at $1.0853, while it has weakened 0.1% against the British pound to trade at GBP0.8828.
The main interventions announced on Tuesday are:
- R20 billion directly for fighting the pandemic. This includes spending on protective equipment for healthcare workers, additional ventilators, staffing, medicine, field hospitals and community screening.
- R20 billion for municipalities for the provision of emergency water supplies, sanitising public transport facilities as well as feeding and housing the homeless.
- R50 billion towards new grants, grant top-ups and other measures to relieve social distress.
- R100 billion for the protection of jobs and job creation.
- R40 billion for income support payments for workers whose employers cannot pay wages.
- R2 billion to assist spaza shop owners and small businesses.
- A R200 billion loan guarantee scheme from the banks, National Treasury and SA Reserve Bank.
- R70 billion in tax relief schemes for distressed businesses.
In addition, taxpayers who donate to the Solidarity Fund will be able to claim 10% as a percentage of their taxable income.
NOVEL CORONAVIRUS MAP
2,553,310 confirmed cases
176,810 reported deaths
Last updated Apr 22, 2020