CENTRAL BANK OF SWAZILAND · Central Bank of Swaziland Quarterly Review - June 2017 1 CENTRAL BANK OF SWAZILAND QUARTERLY REVIEW JUNE 2017 ... e-mail: [email protected]

Central Bank of Swaziland Quarterly Review - June 2017a

S DW NA AZIL

EMNTSHOLI

QUARTERLY REVIEWJUNE 2017

CENTRAL BANKOF SWAZILAND

Central Bank of Swaziland Quarterly Review - June 2017b

Central Bank of Swaziland Quarterly Review - June 20171

CENTRAL BANK OF

SWAZILAND

QUARTERLY REVIEWJUNE 2017

The Quarterly Review is prepared by the Research Department of the Central Bank of Swaziland

Enquiries concerning the Review should be addressed to:-

GM, Economic Policy, Research and Statistics Central Bank of Swaziland P.O. Box 546 MBABANE, Swaziland Tel: 2408-2243 e-mail: [email protected]

General NotesThe following symbols and conventions are used throughout this review.n.a.: not available -: nil or less than half of the final digit shown

Users should also note that:Owing to the rounding of figures, the sum of separate items will sometimes differ in the final digit from the total shown; and data in the tables are subject to revision from time to time as more current information becomes available.


TABLE OF CONTENTS

1. OVERVIEW OF GLOBAL ECONOMIC DEVELOPMENTS .............................................. 7

2. RECENT ECONOMIC DEVELOPMENTS FOR SELECTED ECONOMIES .............................. 7

3. ECONOMIC DEVELOPMENTS IN SOUTH AFRICA .................................................... 12

4. DOMESTIC ECONOMIC DEVELOPMENTS............................................................. 134.1 GENERAL OVERVIEW .......................................................................... 13

4.1.1 Headline Inflation .................................................................. 134.1.2 Exchange Rate/Real Effective Exchange Rate ................................. 15

4.2 MONETARY SECTOR ........................................................................... 17 4.2.1 Net Foreign Assets .................................................................. 17 4.2.2 Gross Official Reserves ............................................................. 18 4.2.3 Credit Extension .................................................................... 18 4.2.4 Money Supply ........................................................................ 20 4.2.5 Domestic Liquid Assets ............................................................ 21 4.2.6 Interest Rates ....................................................................... 22

4.3 MONEY AND CAPITAL MARKETS .............................................................. 244.3.1 Swaziland Government Treasury Bills ............................................ 244.3.2 Swaziland Government Bonds ..................................................... 25 4.3.2.1 Bond Issuances ........................................................... 26 4.3.2.2 Coupon Payments ........................................................ 26

4.4 PUBLIC EXTERNAL DEBT ..................................................................... 284.4.1 Debt Stock ........................................................................... 284.4.2 Disbursements ...................................................................... 284.4.3 Debt Service ........................................................................ 284.4.4 New Loans/Loan Maturity ......................................................... 28

4.5 BALANCE OF PAYMENTS ...................................................................... 294.5.1 Overview ............................................................................ 294.5.2 Current Account .................................................................... 294.5.3 Trade Account ...................................................................... 294.5.4 Services Account ................................................................... 314.5.5 Primary Income ..................................................................... 314.5.6 Secondary Income .................................................................. 314.5.7 Financial Account .................................................................. 31

5. STATEMENT OF MONETARY POLICY CONSULTATIVE COMMITTEE ................................ 33

5.1 Monetary Policy Statement - May 2017 ................................................... 33


LIST OF FIGURES

Figure 1: Gold and Oil Prices (US Dollars). ............................................................ 11Figure 2: South Africa GDP Growth .................................................................... 12Figure 3: South Africa PPI and CPI ..................................................................... 13Figure 4: Inflation Trends ................................................................................ 14Figure 5: Monthly Lilangenis NEER/REER Indices .................................................... 16Figure 6: Cross Atlantic Currency Rates ............................................................... 16Figure 7: Basket Currency Rates ........................................................................ 17Figure 8: Net Foreign Assets ............................................................................ 17Figure 9: Gross Official Reserves & Import Cover .................................................... 18Figure 10: Private Sector Credit ......................................................................... 19Figure 11: Private Sector Credit Composition ......................................................... 19Figure 12: Net Government Balances with Banking Sector .......................................... 20Figure 13: Money Supply .................................................................................. 21Figure 14: Domestic Liquid Assets and Liquidity Ratio ............................................... 21Figure 15: Monetary Base, Deposits and Loans ........................................................ 22Figure 16: Interest Rates .................................................................................. 22Figure 17: Treasury Bills and The Average Discount Rate ............................................ 24Figure 18: Treasury Bills & Bonds ........................................................................ 27Figure 19: Current Account ............................................................................... 30Figure 20: Financial Account ............................................................................. 32

LIST OF TABLES

Table 1: Major Economic Indicators ................................................................... 6Table 2: Swaziland Comparative Interest Rates ..................................................... 23Table 3: Savings Deposits Rates for Banks ........................................................... 23Table 4: Holdings of Swaziland Government Treasury Bills ........................................ 24Table 5: Holdings of Swaziland Government Bonds ................................................. 25Table 6: Swaziland Government Bonds Listed on Swaziland Stock Exchange .................. 25Table 7: Second Quarter Coupon Payments .......................................................... 26Table 8: Private Placements ........................................................................... 27Table 9: Standard Critical Value of Debt Ratios ..................................................... 28


STATISTICAL TABLES

Central Bank

S 1.1 Central Bank of Swaziland, Assets .......................................................... 35S 1.2 Central Bank of Swaziland, Liabilities ..................................................... 36S 1.3 Denominations of Swaziland Currency Issued by the Central Bank of Swaziland ... 37

Money

S 2.1 Depository Corporations Survey............................................................. 38 S 2.1.1 Central Bank of Swaziland Survey ............................................... 39 S 2.1.2 Other Depository Corporations Survey .......................................... 40 S 2.1.3 Depository Corporations Survey .................................................. 41S 2.2 Other Depository Corporations and Monetary Ratios .................................... 42S 2.3 Money Supply .................................................................................. 43

Commercial Banks

S 3.1 Bank Liquidity Requirements ................................................................ 44S 3.2 Bank Reserve Requirements ................................................................. 44S 3.3 Bank Liquidity Position ...................................................................... 45S 3.4 Reserve Requirement Position of the Banks .............................................. 46S 3.5 Assets of Other Depository Corporations (Banks and Building Society) ............... 47S 3.6 Liabilities of Other Depository Corporations (Banks and Building Society) .......... 48S 3.7 Total Other Depository Corporations Loans and Advances by Category of Borrowers .................................................................... 49S 3.8 Total Bank Loans and Advances by Type of Industry (Other Non-Financial Corporations) ........................................................ 50S 3.9 Ownership of Other Depository Corporations Deposits (Deposits in Foreign Currency Included) .................................................. 51S 3.9 Ownership of Other Depository Corporations Deposits (Deposits in Foreign Currency Included) (contd) ........................................ 52S 3.10 Classification of Selected Other Depository Corporations Deposits ................... 53

Money Market

S 4.1 Interest Rates Paid on Deposits in Swaziland (%) ........................................ 54S 4.2 Comparative Interest Rates: Swaziland and South Africa ............................... 55

Government Debt

S 5.1 Outstanding Issues of Swaziland Government Stocks and Stocks Guaranteed by Government .......................................... 56S 5.2 Ownership of Swaziland Government Stocks and Bills ................................. 57S 5.3 Maturity Distribution of Swaziland Government Securities ............................ 58S 5.4 Government of Swaziland Treasury Bills ................................................... 59


Budget

S 6.1 Summary of Central Government Operations ............................................. 60S 6.2 Swaziland Government Current Revenue .................................................. 61 Balance of Payments

S 7.1 Swazilands Summary Balance of Payments ............................................... 62S 7.2 International Investment Position (IIP) .................................................... 63S 7.3 Balance of Payments - Financial Account ................................................. 64S 7.4 Export of Goods by Commodity Section ................................................... 65S 7.5 Import of Goods by Commodity Section ................................................... 66S 7.6 Total Public External Debt Stock ........................................................... 67S 7.7 Swazilands Official Reserves ................................................................ 68S 7.8 Swazilands Foreign Assets ................................................................... 69S 7.9 Selected Foreign Exchange Rates .......................................................... 70

Prices

S 8.1 CMA Comparative Price Indices ............................................................. 71S 8.2 Swaziland Consumer Inflation ............................................................... 72

Real Economy

S 9.1 Mineral Production ............................................................................ 73S 9.2 Electricity Consumption ...................................................................... 74S 9.3 Treated Water Consumption ................................................................. 75S 9.4 Construction ................................................................................... 76


TABLE 1:MAJOR ECONOMIC INDICATORS; 2010 - 2016Table 1

MAJOR ECONOMIC INDICATORS

2010 2011 2012 2013 2014 2015 2016REAL SECTOR #Nominal GDP E' Million/1 25,827.56 27,641.50 39,970.08 44,519.30 48,756.33 52,547.00 54,828.64Real GDP (factor cost) - E' Million/1 13,232.65 13,408.27 37,249.57 38,953.19 40,023.81 40,771.00 40,515.38 Real growth rate/1 1.77 1.33 3.43 4.57 2.75 1.87 (0.63)GDP/Capita/1 24,469.00 25,887.00 34,479.49 35,633.63 36,181.68 36,423.00 35,770.21Agric./GDP (%) - market price/1 8.71 10.45 7.05 6.98 6.49 7.09 6.34Manuf./GDP (%) - markey price/1 27.31 24.46 34.56 34.00 34.38 34.09 34.64Govt./GDP (%) - market price/1 14.62 15.01 16.65 17.02 16.37 11.60 6.09Population ('000)/1 1,055.51 1,067.77 1,080.34 1,093.16 1,106.19 1,119.38 1,132.66Average inflation 4.50 6.10 8.95 5.63 5.67 4.96 7.83

BALANCE OF PAYMENTS - (E' Million)***Merchandise exports 13,217.43 13,837.94 15,813.39 18,294.70 19,557.90 21,026.57 24,378.67Merchandise imports (14,314.62) (14,157.14) (15,174.23) (16,343.80) 18,191.80 17,666.65 18,504.67Trade balance (1,097.19) (319.21) 639.16 1,950.80 1,366.10 3,359.92 5,874.00Net services (3,161.95) (4,128.33) (4,798.58) (4,857.30) (3,540.91) (2,480.83) (3,058.72)Primary income (1,655.67) (1,856.55) (2,576.11) (3,486.10) 281.55 497.03 (153.79)Secondary Income 2,968.20 3,845.43 8,005.70 8,698.40 8,029.65 8,003.16 6,780.66Current account (2,946.61) (2,458.65) 1,270.16 2,305.80 6,136.39 9,379.28 5,923.19Direct investment (net) 986.20 742.20 789.12 230.60 (590.06) (1,084.11) (397.03)Portfolio investment (net) 455.41 (753.27) (107.82) (137.60) 2,121.92 315.29 (291.85)Other investment (net) (656.46) 846.54 (1,335.34) (149.20) 9,085.75 7,553.57 10,071.78Overall balance (1,692.82) (689.99) 1,303.31 1,826.40 (76.05) 263.51 (355.78)Exchange rate* (E/US Dollar) 7.33 7.26 8.21 9.65 10.85 12.75 14.99

MONEY AND BANKINGNarrow money growth (%) 8.30 13.30 19.30 28.60 (3.50) 11.76 26.76Quasi money growth (%) 6.42 (1.37) 5.51 9.00 8.76 14.62 26.19Broad money growth (%) 7.00 3.00 10.00 15.90 3.94 13.58 26.39Domestic credit (net) - E' Million 4,859.80 7,658.88 6,470.29 6,748.70 7,903.91 8,683.43 12,203.66 Government (2,031.20) (618.89) (1,589.80) (3,008.44) (2,965.02) (2,737.66) (833.65) Private sector 6,891.02 8,277.77 8,060.09 9,757.14 10,868.93 11,421.09 13,037.31Interest rates (% p.a) Prime lending 9.00 9.00 8.50 8.50 8.75 9.25 10.50 Discount rate 5.50 5.50 5.00 5.00 5.25 5.75 7.00 Deposit rate - 31 days 2.43 2.43 1.81 1.81 1.94 2.31 3.45 - 12 months 3.18 3.18 2.97 2.97 3.24 3.78 4.89 - T. bill rate 5.72 6.79 6.52 6.29 6.59 6.44 7.95Ratios

Liquidity ratio (required = 20%) 22.60 25.90 26.20 27.08 27.55 26.63 28.70 Loans/deposits ratio 76.20 95.90 85.60 89.85 92.48 84.05 75.10

Net foreign assets (E) 5,629.89 4,102.96 6,317.16 7,920.29 7,731.61 9,109.54 8,831.28Gross official foreign reserves (end of period) (E) 4,496.60 4,179.40 5,579.67 7,911.01 7,916.08 8,484.84 7,723.04In months of imports of goods and services 2.80 2.30 2.90 3.90 3.59 3.80 3.60

PUBLIC FINANCE [E'Million] Total revenue and grants 6,830.63 7,184.15 12,034.70 13,106.18 14,731.13 14,452.32 14,351.53Total expenditure and net lending (10,338.30) (9,132.33) (10,567.40) (12,889.82) (15,304.43) (16,998.65) (21,193.88)Overall surplus/deficit (3,507.67) (1,948.18) 1,467.30 216.36 (573.31) (2,546.33) (6,842.35) As a % of GDP (10.60) (5.40) 3.70 0.50 (1.20) (4.80) (12.30)External financing (net) (118.76) (135.94) (146,043.00) 38,642.00 33.07 528.12 (1,208.95)Domestic financing (net) 3,626.43 2,084.12 (1,321,254.00) (255,006.00) 540.24 2,018.20 5,633.41Total external debt** [E' million] 2,542.66 2,772.87 2,715.21 3,400.41 3,567.85 4,427.05 4,919.38 As a % of GDP 7.36 7.70 6.79 7.64 7.32 8.42 9.36 As a % of exports of goods and services 16.84 17.32 15.25 16.55 14.97 18.58 20.65Debt service (E' million) 358.17 388.06 359.87 349.13 322.24 383.17 526.25 As a % of GDP 1.08 1.08 0.90 0.78 0.66 0.73 0.96 As a % of exports of goods and services 2.37 2.42 2.02 1.70 1.35 1.50 2.11

Source: Central Bank, Ministry of Finance and Economic Planning & Development

Note: N/A = Not available* Exchange rate quoted at average period as at December 2016./1 Revised# GDP figures are based on CSO provisional data and rebased to the new base year 2011.**Total external debt stock excludes private sector debt from 2010.*** 2014-2016 are now in the new BPM6 format and still subject to further revisions.


1. OVERVIEW OF GLOBAL ECONOMIC DEVELOPMENTS

The global economic momentum continued in the second quarter of 2017 as major economies shrugged off geopolitical tensions and a stalled policy agenda in the United States (US). Manufacturing activity remained buoyant in the major industrialised economies, although performance in major developing economies was mixed. European growth improved, with Germany growing strongly and raising hopes of a French revival. Chinas growth surprised on the upside, but concerns remained over the potential effects of the countrys massive debt. Confidence indicators suggested reasonable support for economic activity in major industrialised economies. Business and consumer confidence remained upbeat in the US and Germany, suggesting steady investment and consumption expenditure prospects. Commodity price gains seen in 2016 have stalled despite the weaker US dollar. However, a generally risk-on environment1 has supported capital flows to emerging economies (SA Nedbank Guide to the Economy, 26 July 2017).

The J.P. Morgan Global Manufacturing Purchasing Managers Index (PMI) remained unchanged at 52.6 index points in June 2017. The index continued to point to solid, steady gains in the global industry at mid-year 2017. At the same time, firming new orders and broad-based production gains across consumer goods and business equipment suggested that factory output was well supported heading into the second half of 2017. The average reading over the second quarter of 2017 recorded 52.7 index points, slightly below 52.9 index points recorded in the first quarter (Markit Economics, 3 July 2017).

In advanced economies, monetary policy has remained accommodative, although the major central banks were leaning towards gradually

draining the excess liquidity injected since 2009. Lower unemployment also raised expectations that interest rate normalisation was imminent, although muted demand driven pressures dampened expectations of aggressive policy normalisation (SA Nedbank Guide to the Economy, July 2017).

2. RECENT ECONOMIC DEVELOPMENTS FOR SELECTED ECONOMIES

The United States: The US economy expanded by an annualised 1.4 per cent quarter-on-quarter in the first three months of 2017, better than the 1.2 per cent second estimate, as consumer spending and exports increased more than previously anticipated. On the other hand, non-residential investment was revised lower and the drag from inventories was higher than initially estimated (US Bureau of Economic Analysis, 29 June 2017).

The US Federal Reserve (FED) raised the target range for its federal funds rate by 25 basis points to between 1 per cent and 1.25 per cent during its June 2017 meeting, in line with market expectations. Information received since the Federal Open Market Committee (FOMC) met in May 2017 indicated that the labour market continued to strengthen and that economic activity has been rising moderately so far this year. Job gains moderated but were solid, on average, since the beginning of the year, and the unemployment rate declined. The US FED kept forecasts for three rate hikes this year while increasing growth projections and lowering inflation expectations (US Federal Reserve, 14 June 2017).

The minutes of the US FOMC meeting held on 13 - 14 June 2017, at which eight of the nine members voted in favour of raising rates, showed that most participants regarded the recent softness in consumer inflation as temporary. Also discussed was when the US Fed would decrease its balance sheet. Participants

1Risk-on risk-off refers to changes in investment activity in response to global economic patterns. For instance, stocks are generally seen as riskier assets than bonds. Therefore, during periods of stocks outperforming bonds, this is said to be a risk-on environment. When stocks are selling off and investors run for shelter in bonds or gold, the environment is said to be risk-off. (Risk-On Risk-Off http://www.investopedia.com/terms/r/risk-on-risk-off)


were split on whether this would take place this year or next year and how this would affect the rate hiking cycle (Federal Reserve, 10 July 2017).

Consumer prices in the US increased by 1.6 per cent year-on-year in June 2017, below 1.9 per cent in May 2017 and compared to market expectations of 1.7 per cent. It is the lowest inflation rate since October 2016 due to a 0.4 per cent fall in gasoline prices. On a monthly basis, consumer prices were flat, following a 0.1 per cent drop in May 2017 and compared to forecasts of 0.1 per cent. The unemployment rate in the US increased to 4.4 per cent in June 2017 from 4.3 per cent in May 2017 (US Bureau of Labour Statistics, 25 July 2017).

In the Eurozone: The Eurozone economy expanded by 0.6 per cent quarter-on-quarter in the first three months of 2017, better than a second estimate of 0.5 per cent and following a 0.5 per cent advance in the previous period. It was the strongest growth rate since the first quarter of 2015, mainly boosted by fixed investment and household consumption. Growth picked up in Germany, Spain and Italy but slowed in France. Year-on-year, the economy advanced by 1.9 per cent, also better than preliminary figures of 1.7 per cent and following a 1.8 per cent expansion in the previous three months (Eurostat, 8 June 2017).

The European Central Bank (ECB) in its June 2017 meeting upgraded its growth forecasts for 2017 to 1.9 per cent, up from an earlier forecast of 1.8 per cent. Furthermore, the ECB expects 2018 GDP growth at 1.8 per cent (from 1.7 per cent). For 2019, GDP growth is also expected to improve to 1.7 per cent (from 1.6 per cent). The ECB held its benchmark-refinancing rate at 0 per cent on 20 July, as widely expected, and confirmed that the net asset purchases were intended to run at the current monthly pace of 60 billion until the end of December 2017, or beyond, if necessary. Policymakers agreed that economic and monetary analysis confirmed the need for a continued substantial degree of monetary accommodation (European Central Bank, 20 July 2017).

Consumer prices in the Eurozone increased by 1.3 per cent year-on-year in June 2017, easing slightly from a 1.4 per cent rise in May 2017 and above market expectations of 1.2 per cent. However, it is the lowest inflation rate so far this year, due to a slowdown in energy prices, preliminary estimates showed (Eurostat, 17 July 2017).

The unemployment rate in the Eurozone was recorded at 9.3 per cent in May 2017, unchanged from the previous months figure and slightly above market expectations of 9.2 per cent. The unemployment rate remained at its lowest level since March 2009. A year earlier, the unemployment was higher at 10.2 per cent (Eurostat, 3 July 2017).

The United Kingdom: The UK economy advanced by 0.3 per cent quarter-on-quarter in the three months to June 2017, in line with market expectations and following a 0.2 per cent expansion in the previous period, a preliminary estimate showed. The growth was driven by services mainly boosted by retail trade and film production and distribution, while construction and manufacturing contracted. On a year-on-year basis, the economy grew by 1.7 per cent, also in line with market expectations and easing from a 2 per cent advance in the previous period (UK Office for National Statistics, 26 July 2017).

The Bank of England voted by five to three votes to keep the Bank Rate at a record low of 0.25 per cent on 15 June 2017, as widely expected. Policymakers showed concerns over rising inflation and slow wage growth and the effects on household spending and GDP. The Monetary Policy Committee voted unanimously to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at 10 billion. The Committee also voted unanimously to keep the stock of UK government bond purchases, financed by the issuance of central bank reserves, at 435 billion (Bank of England, 15 June 2017).

Consumer prices in the UK rose by 2.6 per cent year-on-year in June 2017, easing from


a four-year high of 2.9 per cent in May 2017 and missing market expectations of a 2.9 per cent gain. It was the lowest inflation rate in three months, as prices rose at a slower pace for motor fuels and certain recreational and cultural goods and services. On a monthly basis, consumer prices were unchanged after rising by 0.3 per cent in May 2017 and missing market forecast of a 0.2 per cent gain (Office for National Statistics, 18 July 2017).

Japan: The Japanese economy advanced by 0.3 per cent quarter-on-quarter in the three months to March 2017, below preliminary estimates of a 0.5 per cent expansion but at the same pace as in the prior quarter. Upward revision in capital expenditure could not offset weaker private consumption. Compared to the December 2016 quarter, domestic demand rose by 0.1 per cent (0.4 per cent in the preliminary estimate) and added 0.1 percentage points to growth. On an annualised basis, the economy grew by 1.0 per cent, much weaker than preliminary estimates of a 2.2 per cent expansion and following a 1.2 per cent growth in the December 2016 quarter. For the 2018 fiscal year, the economy is expected to expand by 1.4 per cent, slightly faster than a previous projection of a 1.3 per cent growth (Cabinet Office of Japan, 25 July 2017). The Bank of Japan left its key short-term interest rate unchanged at -0.1 per cent at its June 2017 meeting, as widely expected. Policymakers also kept the 10-year government bond yield target around zero per cent and offered a more upbeat view on private consumption and overseas economies. Regarding the conduct of monetary policy, the Bank will continue (as long as it is necessary) with the Quantitative and Qualitative Monetary Easing (QQE) with a negative interest rate, to achieve the price stability target of 2 per cent. The Bank will make policy adjustments as appropriate, taking into account of developments in economic activity and prices as well as financial conditions (Bank of Japan, 20 July 2017).

Consumer prices in Japan increased by 0.4 per cent year-on-year in May 2017, the same as in April 2017 but below market expectations

of 0.5 per cent. Prices went up faster for electricity but fell further for fresh fruits and vegetables. Core inflation increased to 0.4 per cent, the highest since March 2015. On a monthly basis, consumer prices were flat, following a 0.1 per cent gain in April 2017. The unemployment rate in Japan rose slightly to 3.1 per cent in May 2017, up from 2.8 per cent in the previous 3 months. The figure was above the market consensus of 2.8 per cent and marked the highest unemployment rate since December 2016 (Statistics Japan, 30 June 2017).

Emerging Markets

Brazil: The Brazilian economy advanced by 1 per cent quarter-on-quarter in the first three months of 2017, following a downwardly revised 0.5 per cent drop in the previous period and in line with market expectations. This was the first expansion after a 2-year recession, boosted by a jump in exports and a smaller drag from consumer spending. On the other hand, public spending fell and investment continued to shrink. Year-on-year, the economy contracted by 0.4 per cent, the least in two years (Trading Economics, 26 June 2017).

The Central Bank of Brazil (CBB) unanimously cut its key Selic2 rate by 100 basis points (bps) to 10.25 per cent on 31 May 2017, as widely anticipated. This was the sixth straight rate decline, bringing borrowing costs to the lowest level since December 2013 amid slowing inflation and a sticky contraction. It follows a 100 bps cut effected in the previous meeting held on 12 April 2017. The CBB statement underscored that inflation developments remained favourable and that inflation expectations for 2017 fell to around 4.0 per cent. The Bank also mentioned that a softer pace of monetary easing relative to the 100 bps cut of the 31 May 2017 meeting was likely to be appropriate at its next meeting. The central bank started its easing cycle in

2The equivalent of Interest rates/Bank rate


October last year after the inflation rate eased from double digits (Central Bank of Brazil, 31 May 2017).

Consumer prices in Brazil increased by 3 per cent year-on-year in June 2017, below the 3.6 per cent recorded in May 2017 and broadly in line with market expectations. It is the lowest inflation rate since April 2007, due to a slowdown in cost of food and a fall in electricity prices (Trading Economics, 10 July 2017).

The unemployment rate in Brazil came in at 13.3 per cent in the quarter ended May 2017, well below market expectations of 13.8 per cent. The unemployment rate declined for the second consecutive period after reaching a record high of 13.7 per cent in the first quarter of the year (Trading Economics, 30 June 2017). Russia: The Russian economy advanced by 0.5 per cent year-on-year in the first three months of 2017, in line with preliminary estimates and following a 0.3 per cent expansion in the previous quarter. A rebound in mining, manufacturing and trade and a jump in transportation boosted growth, final figures showed. The economy returned to growth after a two-year recession that was mainly caused by low oil prices and sanctions imposed on Russian individuals and businesses in response to the annexation of Crimea. The Central Bank of Russia recently increased its GDP growth forecasts for 2017 to between 1.3 - 1.8 per cent from between 1.0 - 1.5 per cent (Trading Economics, 5 July 2017).

Russia is the worlds biggest energy exporter and was hit hard by the sharp decline in the international oil price as well as western sanctions over Russias role in the Ukrainian conflict. However, Russia overtook Saudi Arabia in December 2016 to become the Worlds leading oil producer3 amid implementation of OPEC production cuts, as Russia remains a non-OPEC oil producing country (Russia Economic Report, June 2017).

The Central Bank of Russia lowered its benchmark one-week repo rate by 25 basis points to 9 per cent on 16 June 2017, while markets expected a 50 basis points rate cut, highlighting that it would continue to conduct a moderately tight monetary policy to maintain inflation close to the 4 per cent target. Furthermore, the Bank signalled the possibility of further rate cuts in the second half of 2017, as inflation expectations continue to decline amid a recovery in economic activity (Central Bank of Russia, 16 June 2017).

Consumer prices in Russia increased by 4.4 per cent year-on-year in June 2017, following 4.1 per cent in the previous month and above market expectations of 4.3 per cent. It was the highest inflation rate since February 2017, as prices increased at a faster pace for food. On a monthly basis, prices went up by 0.6 per cent after advancing by 0.4 per cent in May (Federal State Statistics Service, 6 July 2017).The unemployment rate in Russia declined to 5.1 per cent year-on-year in June 2017 from 5.4 per cent in May 2017 and below market expectations of 5.2 per cent. It was the lowest unemployment rate since October 2014, as the number of unemployed people decreased by 331 000 to 3.846 million (Federal State Statistics Service, 19 July 2017).

India: Real GDP in India expanded by 1.5 per cent quarter-on-quarter in the first quarter of 2017, maintaining the same level of GDP growth recorded in the previous quarter. The continuing remonetisation should enable a pick-up in discretionary consumer spending, especially in cash-intensive segments of the economy. Furthermore, the reductions in banks lending rates post-demonetisation should support both consumption and investment demand of households and stress-free corporates (Trading Economics, 27 June 2017).

The Reserve Bank of India held its benchmark repo rate at 6.25 per cent on 7 June 2017

3According to data published on the website of the Joint Organisations Data Initiative in Riyadh in December 2016; the US and Iraq follow in 3rd and 4th place respectively.


as widely expected, saying the decision was consistent with a neutral monetary policy stance. The reverse repo rate was also left unchanged at 6 per cent, following a 25 basis points cut in April; the bank rate at 6.5 per cent and the cash rate at 4 per cent (Reserve Bank of India, 7 June 2017).

Consumer prices in India increased by 1.54 per cent year-on-year in June 2017, slowing sharply from a 2.18 per cent rise in May and below market expectations of 1.7 per cent. The inflation rate fell to a fresh record low for the third month as food prices declined faster amid a favourable monsoon (rainy season) (Trading Economics, 12 July 2017).

China: The Chinese economy advanced by 1.7 per cent quarter-on-quarter in the second half of 2017, following a 1.3 per cent growth in the previous three months and in line with market estimates. It was the strongest expansion since the quarter ended September 2015 driven by a resurgent manufacturing sector. For 2017, the Chinese government expected the economy to grow by around 6.5 per cent; compared to a 6.7 per cent expansion in 2016 (China National Bureau of Statistics, 25 July 2017).

The Peoples Bank of China (PBoC) left interest rates for open market operations unchanged on 15 June 2017. The rate for 7-day reverse repurchase agreements remained at 2.45 per cent, the 14-day tenure at 2.60 per cent and the 28-day tenure at 2.75 per cent, PBoC said in a statement on its website. The benchmark lending rate was held steady at 4.35 per cent. It was last cut by 25 basis points in October 2015 (The Peoples Bank of China, 27 June 2017).

Chinas consumer prices rose by 1.5 per cent year-on-year in June 2017, the same pace as in May and matching market consensus. The inflation rate remained at its highest level since January 2017, as the cost of non-food slowed slightly while cost of food fell at a slower pace. On a monthly basis, consumer prices fell by 0.2 per cent, after declining by 0.1 per cent a month earlier and marking the fastest drop since March. The unemployment rate in China decreased to 3.97 per cent in the first quarter of 2017 from 4.02 per cent in the fourth quarter of 2016 (China Bureau of Statistics, 10 July 2017).

FIGURE 1: GOLD & OIL PRICES (US DOLLARS); JUNE 2016 - JUNE 2017

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1050

Jun-

16

Jul-

16

Aug-

16

Sep-

16

Oct

-16

Nov

-16

Dec

-16

Jan-

17

Feb-

17

Mar

-17

Apr-

17

May

-17

Jun-

17

Source: www.indexmundi.com


The South African economy continued to struggle in the second quarter of 2017 following the surprise contraction in the first quarter. Further deterioration in the policy and political environment resulted in the long-dreaded downgrade to sub investment grade by two of the major credit rating agencies (Standard & Poor and Fitch Credit Ratings Agencies), hurt consumer and business confidence and worsened prospects for the remainder of the year.

South African GDP contracted by an annualised 0.7 per cent quarter-on-quarter in the first three months of 2017, following a 0.3 per cent drop in the previous period and compared to market expectations of a 0.9 per cent

expansion. This was the first recession since 2009 as both trade and manufacturing recorded negative growth rates. The largest negative contribution came from trade, catering and accommodation which contracted by 5.9 per cent, following a 2.1 per cent rise in the previous period. Manufacturing also dragged down GDP, falling for the third straight quarter (-3.7 per cent from -3.1 per cent), as production of petroleum, chemical products, rubber and plastic products decreased. Year-on-year, the GDP rose by 1.0 per cent, higher than 0.7 per cent in the previous period and in line with market expectations. This was the highest growth rate since the second quarter of 2015 as mining rebounded and agriculture grew the most (Statistics South Africa, 27 June 2017).

3. ECONOMIC DEVELOPMENTS IN SOUTH AFRICA

FIGURE 2: SOUTH AFRICA GDP; MARCH 2015 - MARCH 2017

Mar

-15

q-o-

q %

cha

nge

4.0

2.0

3.0

1.0

0.0

-1.0

-2.0

Jun-

15

Sep-

15

Dec

-15

Mar

-16

Jun-

16

Sep-

16

Dec

-16

Mar

-17

Source: Statistics South Africa

The South African Reserve Bank (SARB) lowered its benchmark repo rate by 25 basis points to 6.75 per cent on 20 July 2017, highlighting that the inflation outlook has improved while domestic growth prospects have deteriorated further following the surprise GDP contraction in the first quarter of 2017. The SARB cut its growth forecast for 2017 to 0.5 per cent from

1 per cent, and the forecast for 2018 to 1.2 per cent from 1.5 per cent (South African Reserve Bank, 20 July 2017).

South Africas consumer prices increased by 5.1 per cent year-on-year in June 2017, easing from 5.4 per cent in May 2016 and missing market expectations of a 5.2 per cent gain. It


was the lowest inflation rate since November 2015, as the cost of transport, clothing and footwear, and restaurants and hotels rose at a slower pace. Annual core inflation rate, which excludes the cost of food, non-alcoholic beverages, petrol and energy, was steady at 4.8 per cent, the lowest rate since January 2013. On a monthly basis, consumer prices increased by 0.2 per cent, after rising by 0.3 per cent in May and below market consensus of 0.3 per cent (Statistics South Africa, 19 July 2017).

The unemployment rate in South Africa increased to 27.7 per cent in the first quarter of 2017 from 26.5 per cent in the previous period. This was the highest jobless rate since the first quarter of 2004 as unemployment rose faster than employment and more people joined the labour force. The number of unemployed persons rose by 433 000 to 6.2 million, the highest since 2001 (Statistics South Africa, 27 June 2017).

FIGURE 3: SOUTH AFRICA PPI AND CPI; JUNE 2016 - JUNE 2017

8.0

Jun-

16

Jul-

16

Aug-

16

Sep-

16

Oct

-16

Nov

-16

Dec

-16

Jan-

17

Feb-

17

Mar

-17

Apr-

17

May

-17

Jun-

17

7.5

5.0

7.0

4.5

6.5

4.0

6.0

3.5

5.5

3.0

Year

-on-

year

% c

hang

e

PPI CPI

Source: Statistics South Africa

4.1. General Overview

4.1.1.HeadlineInflationAccording to the Central Statistics Office, headline consumer inflation remained unchanged averaging 7.0 per cent in the quarter ended June 2017, same as it was in the quarter ended March 2017. Although the rate was steady during the period under review, there were mixed movements within the different components in the CPI basket. The improvement in weather conditions in the last quarter of 2016 and first quarter of

2017 somewhat reversed the severe negative effects of the ElNino induced drought on food prices which prevailed for most part of 2016. As a result, food inflation moderated to a single digit for the first time in nearly 5 quarters, averaging 9.1 per cent in the quarter ended June 2017 compared to 13.5 per cent in the previous quarter. This deceleration was mainly driven by slower increases in the prices for cereals, pasta products, oils and fats and milk, cheese and eggs. On the other hand, the transport index grew by a slower rate of 3.2 per cent in the quarter ended June

4. DOMESTIC ECONOMIC DEVELOPMENTS


The countrys headline inflation is expected to be contained in 2017 mainly driven by favourable outcomes on food prices. The significant improvements in maize production locally and regionally (on the back of favourable weather conditions) have aided a downtrend in maize prices. The South African Future Exchange (SAFEX) white maize prices continued to be on downward trend, declining by 34.5 per cent between the quarter ended

March 2017 and the quarter under review. In line with the continuous downward adjustments on the SAFEX maize prices which represent the countrys maize imports prices, the National Maize Corporation (NMC) also adjusted downwards its domestic maize prices by 17 per cent effective April 2017. This has resulted in contained prices for processes maize products such as mealie meal and other cereal products such as flour.

FIGURE 4: INFLATION TRENDS; JUNE 2016 - JUNE 2017

Jul-

16

Jun-

16

Year

-on-

Year

% C

hang

es

20.018.0

10.0

16.0

8.0

14.0

6.0

2.0

12.0

4.0

0.0

Aug-

16

Sep-

16

Oct

-16

Nov

-16

Dec

-16

Jan-

17

Feb-

17

Mar

-17

Apr-

17

May

-17

Jun-

17

Food Transport Overall Other

Source: Central Statistics Office

2017 from 4.1 per cent in the quarter ended March 2017, owing to high base effects from the previous year. Further decreases were observed in the growth rates for the price indices for communication and recreation and culture.

The above decreases were mainly counteracted by increasing rates of growth in the price index for housing and utilities which grew by 8.1 per cent in the quarter ended June 2017 from 3.6 per cent recorded in the quarter ended March 2017. This acceleration mainly resulted from an increase in housing rentals and the implementation of electricity and water tariffs in April 2017. Electricity prices rose by 18.4 per cent year-on-year in the quarter

ended June 2017 following a 15 per cent tariff increase effected in April 2017, while water prices grew by 3.9 percentage points during the same period. Other notable increases were observed in the price indices for education and alcoholic beverages and tobacco.

Core inflation measured as CPI excluding food and non-alcoholic beverages, fuel and energy averaged 6.2 per cent in the quarter ended June 2017 from 4.7 per cent in the previous quarter. This increase was mainly due to the increase in the prices of services. The CPI for services averaged 6.4 per cent in the quarter ended June 2017 from 4.0 per cent in the previous quarter.


There is however a threat in the Southern African regions crop arising from the fall army worm which has invaded maize fields and is almost impossible to eradicate completely. This effect, however, is not expected to outweigh the gains made from the recovery from the negative drought effects. Food inflation is expected to stay on a downward trend largely influenced by falling prices of cereals.The deceleration in food prices would however be modest as meat prices are expected to remain on the upside as farmers would be restocking their livestock that was eroded by the previous year drought.

Inflationary pressures emanating from recent upward adjustments in administered prices remain on the high side in the medium-term. The Swaziland Electricity Company was granted a 15 per cent two- year tariff hike for the 2017/18 and 2018/19 financial years which is effective 1st April of each year. Water tariffs increases also entered into their last year of a three-year-multi-tariff of 7.2 per cent. A combination of a relatively stronger Rand (though volatile) and contained international oil prices would also contribute to deflationary pressures in the medium-term. High base effects from previous years administered price increases in the transport category would also continue to feed into deflationary pressures during the course of 2017.

4.1.2 Exchange Rate/Real Effective Exchange Rate

During the second quarter of 2017, the external value of the Lilangeni/Rand continued to strengthen on average against major currencies. However, the domestic unit strengthened slightly against the US dollar to an average of E13.22 in the second quarter of

2017 from an average of E13.23 recorded in the previous quarter. The strengthening of the domestic unit was attributed to economic and political uncertainty in the US. The strength of the domestic currency was also supported by the relatively high interest rates in the emerging markets compared to those of the developed economies. The local unit ended the period under review trading at E13.09 to the US Dollar, E17.02 to the Pound Sterling and E14.94 to the Euro.

Expressed against a basket of trading partners currencies, the value of the domestic currency as measured by the Nominal Effective Exchange Rate (NEER) recorded a depreciation of 0.64 per cent on average during the quarter under review after recording an appreciation of 0.83 per cent in the previous quarter. The inflation adjusted effective exchange rate value of the currency as measured by the Real Effective Exchange Rate (REER) appreciated during the quarter under review by an average of 0.24 per cent after recording an appreciation of 0.60 per cent in the previous quarter. The currencys appreciation in REER terms indicates that domestic prices were increasing at a relatively higher pace compared to those of the trading partners.

The appreciation in the REER implies a deterioration in the competitiveness of domestic exports, particularly exports destined for countries outside the Common Monetary Area. If the appreciation is sustained in the short-to-medium term, external demand for domestic commodities is likely to shrink because it renders exports more expensive. The appreciation in the REER therefore does not augur well for the countrys export sector. However, the appreciation of the domestic currency is favourable for the country in servicing its external debts.


FIGURE 5: MONTHLY LILANGENIS NEER/REER INDICES; JUNE 2016 JUNE 2017

Jun-

16

Inde

x (2

010=

100)

112

106

100

110

104

98

108

102

96O

ct-1

6

Feb-

17

Jul-

16

Nov

-16

Mar

-17

Aug-

16

Dec

-16

Apr-

17

Sep-

16

Jan-

17

May

-17

Jun-

17

NEER REER

Source: Central Bank of Swaziland

FIGURE 6: CROSS ATLANTIC CURRENCY RATES; JUNE 2016 - JUNE 2017

Jun-

16

Emal

ange

ni

25

20

15

10

5

0

Sep-

16

Dec

-16

Mar

-17

Jul-

16

Oct

-16

Jan-

17

Apr-

17

Aug-

16

Nov

-16

Feb-

17

May

-17

Jun-

17

E/GBPE/USD



FIGURE 7: BASKET CURRENCY RATES; JUNE 2016 - JUNE 2017

25

10

20

5

15

0

Emal

ange

ni

Jun-

16

Dec

-16

Sep-

16

Mar

-17

Jul-

16

Jan-

17

Oct

-16

Apr-

17

Aug-

16

Feb-

17

Nov

-16

May

-17

Jun-

17

E/SDR E/EURO


4.2 MONETARY SECTOR

4.2.1 Net Foreign AssetsDuring the quarter ended June 2017, net foreign assets increased by 17.1 per cent to E8.4 billion, a notable turnaround from the 18.3 per cent decline registered in March 2017. The rise in net foreign assets was evident in net foreign holdings of other depository corporations while net official assets fell. Net foreign holdings of other depository holdings accelerated by 154.7 per cent from the previous quarter to E2.5 billion, largely on

account of an inflow of export receipts which were then invested in CMA banks. On the other hand, net official assets decreased by 5.0 per cent quarter-on-quarter to E5.9 billion, having fallen by an almost similar rate in the previous quarter. When valued in Special Drawing Rights (SDR), net foreign assets amounted to SDR462.5 million reflecting an increase of 16.2 per cent from the quarter ended March 2017. Compared on an annual basis, the net foreign assets grew by 8.5 per cent in Emalangeni and by 21.9 per cent in SDR terms.

FIGURE 8: NET FOREIGN ASSETS; JUNE 2015 - JUNE 2017

Jun

Mar

DecSep

Jun

Mar

Dec Sep

Jun

10.0 550.0

500.0

450.0

400.0

350.0

300.0

9.0

8.0

7.06.0

5.04.0

3.0

E SDR

EBi

llion

SDR

Mill

ion

2015 2016 2017



4.2.2GrossOfficialReservesOver the quarter ended June 2017, gross official reserves decreased by 6.0 per cent to reach E6.9 billion. At this level, the reserves were sufficient to cover an estimated 3.3 months of imports of goods and services, lower than the 3.4 months covered in the previous quarter. When valued in SDR terms,

the reserves amounted to SDR377.0 million, indicating a quarter-on-quarter decline of 6.0 per cent after falling by 3.4 per cent in the preceding quarter. When compared from the previous year, the reserves declined by 6.6 per cent in SDR terms and by 16.9 per cent in Emalangeni terms.

4.2.3 Credit ExtensionAt E13.1 billion at the end of June 2017, credit extended to the private sector recorded an increase of 5.1 per cent quarter-on-quarter. This was contrary to the 4.5 per cent fall recorded during the quarter ended March 2017.

The growth in credit to the private sector was a result of an increase in credit to all its components during the review quarter. Credit extended to other sectors expanded notably by 31.7 per cent during the review quarter compared to a fall of 18.0 per cent recorded at the end of the previous quarter. The growth in credit to other sectors was largely a result of a rise of 52.1 per cent in credit to public non-financial corporations. Credit extended to the local government sector also increased by 23.2 per cent compared to a decrease of 11.3

per cent during the first quarter ended March 2017. Credit to other financial corporations on the other hand, expanded by 22.9 per cent from a fall of 10.8 per cent recorded in the preceding quarter.

Credit to households rose by 2.9 per cent over the review quarter compared to a fall of 3.5 per cent recorded in the previous quarter. The increase in credit to households was primarily on account of credit extended for other personal loans which grew by 4.5 per cent quarter-on-quarter. Mortgage finance also increased by 2.5 per cent compared to a decline of 1.9 per cent recorded during the past quarter ended March 2017. Credit for motor vehicle finance improved by 2.2 per cent over the quarter, indicating an improvement from the 2.1 per cent fall registered in the previous quarter.

FIGURE 9: GROSS OFFICIAL RESERVES & IMPORT COVER; JUNE 2015 - JUNE 2017

Jun

EBi

llion

s

Impo

rt C

over

in M

onth

s

9.0 4.5

4.0

3.5

3.0

2.5

2.0

1.5

8.0

7.0

6.0

5.0

4.0

3.0

Sep

Dec Mar

Jun

Sep

Dec Mar

Jun

2015 20172016

GrossOfficialReserves Import Cover

Source: Central Bank of Swaziland and Other Depository Corporations


FIGURE 10: PRIVATE SECTOR CREDIT; JUNE 2015 - JUNE 2017

Jun

2015 2016 2017

Tota

l, B

usin

esse

s, H

ouse

hold

s (E

Bill

ion)

13.01.4

Oth

er (

EBi

llion

)

1.2

1.0

0.8

0.6

0.4

0.2

0.0

11.0

9.0

7.0

5.0

3.0

Sep

Dec Mar

Jun

Sep

Dec Mar

Jun

Credit to Other Sectors Credit to BusinessesCredit to Households Total Private Sector Credit


Credit to businesses grew by 2.7 per cent during the review quarter to close at E5.9 billion. The rise in credit to businesses was discernible in the distribution and tourism (12.1 per cent), community, social and personal services (9 per cent) and agriculture and forestry (2.5 per

cent) sectors. However, quarter-on-quarter declines in credit to businesses were recorded in the construction (7.1 per cent), real estate (5.8 per cent) as well as manufacturing (1.8 per cent) sectors.

FIGURE 11: PRIVATE SECTOR CREDIT COMPOSITION; JUNE 2015 - JUNE 2017

Jun

100.0

80.0

60.0

40.0

20.0

0.0

Sep

Dec Mar

Jun

Sep

Dec Mar

2015

Per

cent

20172016

Jun

Households Businesses Other Sectors



When analysed by proportions, over the review quarter, a substantial share of private sector credit was absorbed by households and businesses. Households constituted 45.1 per cent of total private sector credit while businesses constituted 44.8 per cent, slightly lower than the proportions recorded during the quarter ended March 2017. Other sectors represented a share of 10.1 per cent of total credit to the private sector, higher than the share of 8.1 per cent recorded in the previous quarter.

Net Government Balances within the banking sector deteriorated to E757.2 million at the end of June 2017, lower than the E808.8 million recorded at the end of March 2017. The contraction in net government balances was mainly due to a fall in government deposits with the banking sector. Government deposits closed at E4.1 billion at the end of June 2017, down from E4.3 billion recorded in the previous quarter. On the other hand, the banking sectors claims on government fell by 2.9 per cent over the quarter to reach E3.4 billion at the end of June 2017.

FIGURE 12: NET GOVERNMENT BALANCES WITH THE BANKING SECTOR; JUNE 2015 - JUNE 2017

Jun

Mar

DecSep

Jun

Mar

Dec Sep

Jun

5.0

3.0

1.0

4.0

2.0

0.0

2015

EBi

llion

20172016

Claims on Central Government Government Deposits


4.2.4 Money SupplyPartly supported by the growth in credit extended to the private sector, broad money supply (M2) also increased by 14.6 per cent to reach E16.5 billion at the end of June 2017. The increase in M2 was evident in both narrow money (M1) and quasi money supply.

Indicating the highest increase, M1 expanded by 19.5 per cent at the end of June 2017 to E5.6 billion. This compares to a fall of 21.5 per cent recorded in March 2017. The rise in M1 was underpinned by increases in both transferable deposits and currency outside depository corporations. Transferable deposits went up by 21.3 cent to close at E5.0 billion

at the end of June 2017. Currency outside depository corporations on the other hand rose by 6.5 per cent from the previous quarter to reach E633.1 million at the end of June 2017.

Quasi money supply increased by a comparatively lower 12.2 per cent during the quarter ended June 2017, after contracting by 9.8 per cent at the end of March 2017. The rise in quasi money supply was registered in time deposits while savings deposits shrank. Time deposits increased by 15.2 per cent to reach E9.1 billion at the end of the second quarter of 2017. Savings deposits plunged by 1.5 per cent during the quarter under review to E1.7 billion.


FIGURE 13: MONEY SUPPLY; MARCH 2015 - JUNE 2017

Jun

Mar

2015 20172016

Sep

Jun

Dec Sep

Mar

Dec Jun

18.0

12.0

4.0

16.0

10.0

2.0

14.0

6.0

8.0

0.0

EBi

llion

Narrow Money Quasi Money Broad Money


4.2.5 Domestic Liquid AssetsDomestic liquid assets of the banks amounted to E3.7 billion, representing an increase of 5.5 per cent from the previous quarter. The banks domestic liquid assets were largely boosted by higher balances held with the Central Bank and

local banks. However, the liquidity ratio fell from 28.5 per cent at the end of March 2017 to 25.6 per cent at the end of June 2017 due to a marked increase in domestic liabilities for which liquidity is required.

FIGURE 14: DOMESTIC LIQUID ASSETS AND LIQUIDITY RATIO; JUNE 2015 JUNE 2017

Jun

Jun

Jun

Sep

Sep

Dec

DecMar

Mar

Liquidity RatioDomestic Liquid Assets

4.00

4.50

3.00

2.00

3.50

2.50

1.50

30.029.028.027.026.025.024.0

23.022.021.020.0

Dom

esti

c Li

quid

Ass

ets

(EB

illio

n)

Liqu

idit

y Ra

tio

(Per

cen

t)

2015 2016 2017

Source: Central Bank of Swaziland and Other Depository Corporations in Swaziland


4.2.6 Interest RatesInterest rates remained stable during the second quarter ended June 2017. Consequently, the discount rate remained at 7.25 per cent and the banks prime lending rate at 10.75 per cent. The interest rate differential between the local discount rate and the South African repo rate was also unchanged at 25 basis points during the quarter under review.

Following a meeting to consider the appropriate monetary policy stance for the Central Bank on 21 July 2017, the discount rate was maintained at 7.25 per cent. Consequently, the general structure of interest rates remained the same. However, since the SARB lowered its repo rate to 6.75 per cent in July, the differential with the local discount rate widened to 50 basis points.

FIGURE 16: INTEREST RATES: JUNE 2015 JULY 2017

Jun

Mar

Sep

Jul

Sep

Jun

Dec

Dec Mar

Jun

10.511.5

5.5

9.5

4.5

8.5

3.5

7.5

2.51.5

6.5

Discount Rate Prime Rate

Per

cent

2015 2016 2017

Source: Central Bank of Swaziland and Other Depository Corporations Survey

FIGURE 15: MONETARY BASE, DEPOSITS & LOANS; JUNE 2015 - JUNE 2017

Jun

18.016.0

12.0

8.0

4.0

14.0

10.0

6.0

2.00.0

2015

EBi

llion

2016 2017

Sep

Dec Mar

Jun

Sep

Dec Mar

Jun

DepositsMonetary Base Loans

Source: Central Bank of Swaziland and Other Depository Corporations Survey


TABLE 2: SWAZILAND COMPARATIVE INTEREST RATES AS AT 30TH JUNE 2017

NEDBANK SWAZI BANK STANDARD BANK

FNB BLDG. SOCIETY

Call* 4.65 3.65 - 4.10 3.00 Up to 3.20 Special. Savings 3.00

31 days* 2.85 3.40 2.55 Up to 4.95 Gold a/c 3.25 - 5.06

88 days* 4.35 3.95 2.55 Up to 5.35 Subs shares 3.00 - 3.75

6 months* 4.40 4.40 2.83 Up to 5.80 6 months 5.25

12 months* 5.90 4.85 2.93 Up to 6.05 12 months 5.4

Savings (See table 3 below)

Prime Lending 10.75 10.75 10.75 10.75 Residential: 9.75

Commercial : 11.50

Source: Commercial Banks & Building Society*Higher rates may be quoted on application for large amounts and subject to negotiation with individual customers

TABLE 3: SAVINGS DEPOSIT RATES FOR BANKS & BUILDING SOCIETY AS AT 30TH JUNE 2017

RANGE RATE (%) RANGE RATE (%)

Standard: E 100 - E 999 0.00 - 0.34 Nedbank: E 500 - E 19,999 1.50

E 1,000 - E 4,999 0.00 - 0.39 E 20,000 - E 49,000 2.85

E 5,000 - E 9,999 0.00 - 0.44 E 50,000 - E 99,000 3.40

E 10,000 - E 99,999 0.00 - 0.59 E100,000 & Above 3.85

E 100,000 - E 149,999 0.20 - 0.79

E 150,000 - E 249,999 1.00 - 1.44

E 250,000 & Above 0.50 - 1.74 S.D.S.B: E 101 - E 1000 0.40

E 1,001 - E 10,000 0.40

E 10,001 - E 50,000 0.90

E 50,001 & Above 1.35

FNBANK : E 500 - E 999 0.92 - 1.35 Building Society: Ordinary Savings 2.25

E 1,000 - E 4,999 0.92 - 1.35

E 5,000 - E 14,999 0.92 - 1.35

E 15,000 - E 19,999 0.92 - 1.35

E 20,000 - E 24,999 0.92 - 1.35

E 25,000 - E 49,999 1.02 - 1.35

E 50,000 - E 74,999 1.02 - 1.35

E 75,000 - E 99,999 1.02 - 1.35

E 100,000 - E 149,999 1.02 - 1.35

E 150,000 - E 249,999 1.02 - 1.35

E250,000 & Above 1.02 - 1.35

Source: Commercial Banks & Swaziland Building Society


4.3 MONEY AND CAPITAL MARKETS

4.3.1 Swaziland Government Treasury BillsTreasury Bills outstanding decreased by 2.3 per cent from E1.657 billion recorded in March 2017 to E1.619 billion at end of June 2017. Participation continued to be dominated by the local commercial banks which held 78 per cent of total Treasury Bills outstanding even though their holdings decreased by 4 per cent in the quarter under review. Holdings by non-bank financial institutions increased by 12 per

cent from E241.1 million to E269.63 million and represented 17 per cent of total treasury bills outstanding at the end of June 2017. The Central Bank of Swaziland holdings increased by E0.50 million from E2.22 million to E2.72 million. Holdings by Other Participants which includes individuals, savings and credit co-operatives, private companies among others, decreased by 14 per cent from E98 million in the previous quarter to E84.49 million at the close of June 2017.

TABLE 4: HOLDINGS OF SWAZILAND GOVERNMENT TREASURY BILLS (EMILLION)

Dec 2016 Mar 2017 Jun 2017Total 1,675.02 1, 675.32 1,619.70Of which: Local Commercial Banks and Building Society 1,262.90 1, 316.00 1,262.86Foreign Banks - - -Non-Bank Financial Institutions 325.40 241.10 269.63Central Bank of SWD (OMO) 3.18 2.22 2.72Other 83.57 98.00 84.49Average Discount (%) 7.840 8.124 8.190Average Yield (%) 8.140 8.183 8.530% of Total Government Domestic Debt 37.95 35.20 33.62


FIGURE 17: TREASURY BILLS & THE AVERAGE DISCOUNT RATE; JUNE 2016 JUNE 2017

2,500.00 8.4

8.0

7.2

7.6

6.8

6.4

Per

cent

EM

illio

n

2,000.00

1,500.00

1,000.00

500.00

0.00

Jun-

16

Sep-

16

Dec

-16

Mar

-17

Jun-

17

Average DiscountT-Bills



4.3.2 Swaziland Government BondsThe value of Government bonds outstanding at the end of June 2017 increased by a margin of 2 per cent from E3.133 billion recorded in March 2017 to E3.197 billion. The change in outstanding bonds was a result of E134.495 million raised through the issuance of a 7-Year bond SG030 and also the maturity of bond SG016 which carried E70.11 million. Non-Bank Financial Institutions continued to dominate holdings of Treasury Bonds as their holdings by the end of June 2017 represented 69.6 per cent of total bonds outstanding and they were

the main players in the issuance of the bond SG030. Their holdings increased by 14 per cent from E1.957 billion recorded in March 2017 to E2.225 billion in June 2017. Commercial banks holdings during the review quarter decreased by 20 per cent from E1.037 billion recorded in March 2017 to E831.83 million in the quarter under review. This was mainly due to reclassification of holdings positions. Other participants and individuals holdings increased slightly by E1.38 million from E138.9 million to E140.28 million.

TABLE 5: HOLDINGS OF SWAZILAND GOVERNMENT BONDS (E MILLION)

Dec 2016 Mar 2017 Jun 2017Total 2, 738.91 3, 133.17 3, 197.56Banks and Building Society 996.83 1, 036.80 831.83Non-Bank Financial Institutions 1, 602.60 1, 956.60 2, 224.60Other 138.70 138.90 140.28Central Bank of SWD (OMO) 0.71 0.80 0.85Foreign Banks 0 0 0% of Total Government Domestic Debt 62.05 65.00 66.38


TABLE 6: SWAZILAND GOVERNMENT BONDS LISTED ON SSX

Bond Coupon Redemption Date Nominal ValueSG011 8.25% 31/01/2018 146 330 000.00 SG016 8.25% 31/08/2018 150 000 000.00 SG017 8.50% 31/10/2020 251 100 000.00 SG018 9.25% 31/01/2024 223 441 000.00 SG020 8.25% 20/10/2019 82 200 000.00 SG021 8.25% 30/07/2018 125 710 000.00 SG022 8.75% 25/09/2022 96 035 000.00SG023 8.75% 30/11/2020 250 000 100.00SG023 8.75% 30/11/2020 76 390 000.00SG024 9.50% 31/05/2019 200 000 600.00SG025 10.00% 20/06/2021 178 050 000.00SG026 (Floater) 9.00% 31/08/2023 178 650 000.00SG027 10.75% 31/10/2026 171 650 000.00SG025 (Reopening) 10.00% 20/06/2021 169 240 000.00SG029 10.50% 28/02/2022 129 260 000.00SG030 10.50% 30/06/2024 134 495 000.00TOTAL 1 760 221 100.00



4.3.2.1 Bond IssuancesTwo bond issuances took place in the period under review. A 5-Year Bond SG029 paying a fixed coupon of 10.50 per cent was reopened at the end of April 2017. The E150.00 million bond was offered with a greenshoe option of 50 per cent of the amount on offer. A total of E78 million competitive bids and E0.250 million non-competitive bids were received. All bids received were rejected as the competitive bids received were deemed to be above the prevailing market rates. At the end of June

2017, a 7-Year bond with a fixed coupon rate of 10.25 per cent was successfully issued. E150 million was offered with a greenshoe option of 50 per cent of the amount on offer. However, only E134.495 million was allotted and comprised of E133 million competitive bids from the E196 million received while only E1.495 million non-competitive bids were received and allotted. In the same quarter the Bank incurred a total of E93.637 million in respect of coupon payments for both Treasury Bonds and Suppliers Bond.

4.3.2.2 Coupon Payments

TABLE 7: SECOND QUARTER COUPON PAYMENTS

Name Coupon Rate (%)

Tenor Date Nominal Amount Coupon Amount

SG017 8.500 7 Year Bond 30-Apr-17 251 100 000.00 10 584 036.97SG020 8.250 5 Year Bond 20-Apr-17 82 200 000.00 3 381 460.28SG019 7.750 3 Year Bond 30-Jun-17 70 110 000.00 2694432.%SG021 8.250 3 Year Bond 30-Jun-17 125 710 000.00 5142 916.65SG023 8.750 5 Year Bond 31-May-17 326 390 100.00 14 240 444.79SG024 9.500 3 Year Bond 31-May-17 200 000 600.00 9 474 001.04SG025 10.000 5 Year Bond 20-Jun-17 347 290 000.00 17 316 926.01SG027 10.750 10 Year Bond 30-Apr-17 171 650 000.00 9150 355.82SG028 9.500 2 Year Bond 16-Jun-17 60 000 000.00 2 842191.78SG24MTMSBS 9.500 2 Year Bond 2-Jun-17 30 000 000.00 1 421 095.89SG18MTMSBS 9.250 1.5 Year Bond 2-Jun-17 20 000 000.00 922 465.75SG36MTMSWA 10.500 3 Year Bond 2-Jun-17 50 000 000.00 2 617 808.22SG18MTNNED 8.850 1.5 Year Bond 5-Jun-17 100 000 000.00 4 412 876.71SG18MTNSTD 9.500 1.5 Year Bond 22-Jun-17 20 000 000.00 947 397.26SG24MTNSTD 9.750 2 Year Bond 22-Jun-17 15 000 000.00 729 246.58SG36MTNSTDI 10.000 3 Year Bond 22-Jun-17 15 000 000.00 747 945.21SG18MTNFNB 9.500 1.5 Year Bond 23-Jun-17 20 000 000.00 947 397.26SG18MTNMVA 9.500 1.5 Year Bond 29-Jun-17 20 000 000.00 947397.26SGI2MTNSMF 9.250 1 Year Bond 30-Apr-17 60 000 000.00 1 353 287.67

SG12MTNSMMF 9.250 1 Year Bond 30-Apr-17 60 000 000.00 1 353 287.67SG36MTNOMS 9.645 3 Year Bond 24-May-17 10 000 235179.45SG12MTNSBSMMF 9.250 1 Year Bond 24-May-17 50 000 1 127 739.73SG36MTNFNB 10.500 3 Year Bond 23-Jun-17 20 000 1 047123.29

2 124 450 700.00 93 637 014.25Source: Central Bank of Swaziland


The table below shows private placements that were issued up to June 2017.

TABLE 8: PRIVATE PLACEMENTS

Security Tenor Maturity Date Rate Amount IssuedMTN18NED_c 1.5 Year Bond 05-Jun-18 8.8500% 100 000 000.00 MTM18SBS_c 1.5 Year Bond 02-Jun-18 9.2500% 20 000 000.00 MTM24SBS_c 2 Year Bond 02-Dec-18 9.5000% 30 000 000.00 MTM36SDSB_c 3 Year Bond 02-Dec-19 10.5000% 50 000 000.00 SG18MTNMVA_c 1.5 Year Bond 29-Jun-18 9.5000% 20 000 000.00 SG36MTNSTD1_c 3 Year Bond 22-Dec-19 10.0000% 15 000 000.00 SG24MTNSTD_c 2 Year Bond 22-Dec-18 9.7500% 15 000 000.00 SG18MTNSTD_c 1.5 Year Bond 22-Jun-18 9.5000% 20 000 000.00 SG18MTNFNB_c 1.5 Year Bond 23-Jun-18 9.5000% 20 000 000.00 SG36MTNFNB_c 3 Year Bond 23-Dec-19 10.5000% 20 000 000.00 SG12MTNSMF_c 1 Year Bond 31-Jan-18 9.2500% 60 000 000.00 SG12MTNMMF_c 1 Year Bond 31-Jan-18 9.2500% 60 000 000.00 SG60MTNAAS_c 5 Year Bond 10-Feb-22 10.7500% 30 000 000.00 SG12MTNOMS_c 1 Year Bond 24-Feb-18 9.2080% 15 000 000.00 SG36MTNOMS_c 3 Year Bond 24-Feb-20 9.6450% 10 000 000.00 SG12MTNSBSMMF 1 Year Bond 24-Feb-18 9.2500% 50 000 000.00 SG24MTNSBS2 2 Year Bond 04-Apr-19 10.2500% 40 000 000.00 Total 575 000 000.00


FIGURE 18: TREASURY BILLS & BONDS; APRIL 2017 JUNE 2017

April 2017

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May 2017 June 2017

3,500.00

3,000.00

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T-Bills T-Bonds



4.4 PUBLIC EXTERNAL DEBT

4.4.1 Debt StockPreliminary figures for the quarter ending June 2017 indicate that public sector external debt increased in nominal terms. The increase was mainly attributed to disbursements from loans for on-going projects.

As at the end of June 2017, total public external debt (including public and publicly guaranteed debt) stood at E5.4 billion, an equivalent of 9.2 per cent of GDP. This reflects an increase of 3.8 per cent when compared to E5.2 billion recorded in the quarter ending March 2017. Central government external debt increased to E5.2 billion in June 2017, from E5.1 billion recorded at the end of March 2017.

4.4.2 DisbursementsDisbursements on public external debt totalled E277.2 million in the quarter ending June 2017. The drawdowns were made from the following institutions: Export/Import (EXIM) Bank of India for

Supply of Agricultural Inputs Project; International Bank for Reconstruction and

Development (IBRD) for Local Government Project;

IBRD for HIV/AIDS and TB Project;

OPEC Fund for International Development (OFID) for Lower Usuthu Water Supply Project;

OFID for Manzini Mbadlane Road Project; OFID for Nhlangano Sicunusa Road Project; Arab Bank for Economic Development in

Africa (BADEA) for Nhlangano Sicunusa Road Project;

KUWAIT Fund for Manzini Mbadlane Road Project; and

Abu-Dhabi Fund for Manzini Mbadlane Road Project.

4.4.3 Debt ServiceFor the quarter ending June 2017, total debt service amounted to E120.8 million. Of this amount, principal repayments accounted for E79.2 million, interest payments accounted for E37.9 million and commitment fees accounted for the remaining E3.7 million.

Swazilands debt ratios have remained reasonably low compared to other African countries based on debt critical ratios for Low Income Countries established by the Brettonwoods Institutions (IMF & World Bank). The countrys debt position for the period ending June 2017 is summarised in the table below:

TABLE 9: STANDARD CRITICAL VALUE OF DEBT RATIOS AS AT JUNE 2017 Ratio Critical

Ratio (%)Swazilands

Ratio (%)Public External Debt Stock to Exports of goods and services 100-200 22.9

Public External Debt Stock to GDP 30-50 9.2

Public Domestic Debt Stock to GDP 20-25 10.4

Public External Debt Service to exports of goods and services 15-25 2.00Source: The World Bank, World Debt Tables: 1989-91 & Central Bank of Swaziland

4.4.4 New Loans / Loan MaturityFor the quarter ending June 2017, one loan reached maturity being an African Development Bank (AfDB) loan for two international roads.

During the same quarter one new loan was signed, being an AfDB loan for Lower Usuthu Smallholder Irrigation Project (LUSIP) Phase II.


4.5 BALANCE OF PAYMENTS (AS AT QUARTER ENDING MARCH 2017)

4.5.1 OverviewFirst quarter 2017 transactions resulted in a deficit in Swazilands overall balance of payments. The deficit is reflected in the E331.4 million net decline in the countrys foreign reserve assets from a E332.8 million net increase in the last quarter of 2016.

4.5.2 Current AccountThe current account grew a quarterly 19.5 per cent, posting a E3.397 billion surplus during the first quarter. The increase during the period was however sluggish when compared with the 76.9 per cent increase in the fourth quarter of 2016. Net inflows in the primary and secondary income accounts coupled with a positive trade balance contributed to the surplus in the current account. As a percentage of GDP, the surplus is equivalent to 5.8 per cent from 5.2 per cent in the final quarter of 2016.

4.5.3 Trade AccountBoth merchandise imports and exports fell during the period, which is normal around the first quarter of every year due to slow global economic activity. This resulted in a 43.9 per cent quarter-on-quarter decline in the trade account surplus to E1.433 billion in the first quarter. Export receipts dropped to E5.646 billion from E7.352 billion in the quarter ending December 2016. The import bill, on the other hand, contracted by 12 per cent quarter-on-quarter to E4.213 billion, a bigger fall than the 7.4 per cent decline in import payments a year earlier.

The countrys major domestic exports registered declines in the first quarter of

2017 with export earnings from miscellaneous edibles dropping a hefty 31 per cent quarter-on-quarter to E2.719 billion. A comparison of the quarter ending March 2017 against the same period last year shows a meagre 1.5 per cent contraction in export receipts from miscellaneous edibles.

Export receipts from sugar and sugar confectionary decelerated by a quarterly 10.35 per cent in the first quarter to E1.266 billion having slowed down by a mild 3.5 per cent in the previous quarter. Over 60.0 per cent of the exports of sugar and sugar confectionary are consumed by the South African market. During the first quarter these exports slid by 13 per cent to E784.5 million.

Textiles recorded a wide 17.3 per cent quarter-on-quarter contraction in export earnings to E670.4 million during the first quarter. This is a turnaround from the 5.9 per cent rise in receipts in the previous quarter. Textiles, however, received a 20.6 per cent boost in export earnings from the same period in 2016. Receipts from the export of wood and wood articles were reported at E314.9 million during the first quarter, a 3.8 per cent quarter-on-quarter decline from the last quarter of 2016.Merchandise imports contracted in the first quarter, registering a wide 12.3 per cent decline to E4.213 billion after a modest 3.4 per cent fall in the fourth quarter. Due to the countrys slow economic activity during the first quarter, fuel imports took a 9.7 per cent quarter-on-quarter dip to E550.4 million during the period. A year-on-year comparison however shows positive growth in fuel imports, having increased by a large 19.3 per cent from E461.2 million.


FIGURE 19: CURRENT ACCOUNT; MARCH 2016 - MARCH 2017

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2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4

Export of Goods & Services Import of Goods & Services

Trade of Balance Current Account Balance

2016Q1 2016Q2 2016Q3 2016Q4 2017Q1


4.5.4 Services AccountThe services account posted a deficit of E665.6 million in the first quarter of 2017, compared to a marginally wider E666.4 million deficit in the previous quarter. Year-on-year the account grew marginally, having maintained a steady trend in 2016 save for a peak in the third quarter. A quarterly analysis shows that services inflows were 12.6 per cent larger at E383.7 million in the first quarter of 2017. Outflows grew by a subdued 4.2 per cent to E1.049 billion in the same quarter. Major trade in services exports reported during the quarter were transport, insurance and pensions as well as construction while major imports reported were transport, travel and other business services.

The net balance in transport services flows recorded flat growth in the first quarter of 2017 when compared with the previous quarter. Transport services inflows experienced a E69.0 million decline to E102.1 million in the first quarter, largely influenced by a decline in freight services exports. Outflows were E476 million, dropping by 12.1 per cent quarter-on-quarter from the previous quarter.

In the first quarter of 2017, the travel services account deficit was E173.3 million, a turnaround from the E75.4 million recorded in the previous quarter. Inflows waned, posting a 44.5 per cent quarterly decline to E31.6 million in the first quarter. Outflows increased by 54.9 per cent, starting the year off with a comparably larger outflow of E204.9 million.

4.5.5 Primary IncomeNet income from abroad recorded a surplus of E956.7 million in the first quarter of 2017, a positive turnaround from the E611.8 million deficit recorded in the preceding quarter. Surpluses in the sub-accounts of compensation of employees of E56.5 million and investment income of E1.266 billion largely explain the overall surplus observed in the primary income account despite the deficit observed in the other primary income category.

The surplus in the primary income account can be explained by the significant net income receivable in the investment income category. Compensation of employees inflows amounted


to E108.1 million in the quarter ending March 2017 from E105.6 million in the previous quarter. Outflows increased by 58.8 per cent to E51.6 million in the first quarter of the year. Investment income outflows amounted to a negative E964.8 million on account of remitted branch profits by the manufacturing sector that were more than retained earnings in the period. Investment income inflows grew to E301.0 million in the first quarter, an 8.9 per cent increase from the preceding quarter. Other investment interest which includes interest earned by the official sector amounted to E129.1 million in the quarter ending March 2017.

Other primary income inflows dropped to E47.9 million, a 59.7 per cent quarter-on-quarter decline from the final quarter of 2016. When compared quarterly, outflows also documented a decline of 14.8 per cent to E413.5 million. Main contributors to outflows continue to be taxes on products and production.

4.5.6 Secondary IncomeIn the first quarter of 2017, the surplus recorded in the secondary income account grew by 6.5 per cent quarter-on-quarter to E1.673 billion. A year-on-year comparison, however, exhibits a decline of 16.3 per cent. The country continues to be a net receiver of transfers in all the functional categories of the secondary income account. Secondary income inflows rose to E1.780 billion in the first quarter, slightly higher than E1.744 billion recorded in the last quarter of 2016. SACU revenue receipts, being the main component, accounted for 73.4 per cent of all inflows in this account. Other inflows include personal and other transfers which amounted to E466.6 million. Secondary income outflows declined to E106.8 million in the first quarter of 2017 from E174.4 million in the quarter ending December 2016. Explaining this fall is a reduction in social benefits outflows coupled with miscellaneous transfers under the other current transfers subcategory.

4.5.7 Financial AccountTransactions in the financial account during the first quarter of 2017 show that the account resulted in a net acquisition of E3.285 billion in foreign assets, against the E2.761 billion net foreign assets acquired in the fourth quarter. The resulting net outflow in the account is explained by a significant acquisition of foreign assets in the direct investment account.

The direct investment account registered a net E2.590 billion decline in foreign liabilities incurred, influenced by large depletion of retained earnings and reduction of debt securities liabilities from the manufacturing sector. Direct investment liabilities were significantly reduced by E2.533 billion in the first quarter of 2017 from a E536.3 million increase in the previous quarter. FDI assets on the other hand posted gains amounting to E57.0 million following a E23.3 million drop in assets acquired in the fourth quarter of 2016.Portfolio investments registered positive growth in the first quarter, netting a E648.5 million increase in acquisitions of foreign assets. This was a positive turnaround when considering the E92.8 million net decline in foreign assets acquired in the quarter ending December 2016.

The other investments account reported a net decline of E332.8 million in liabilities incurred during the first quarter after an impressive E3.032 billion net increase in foreign assets acquired in the previous period. Liabilities incurred in the first quarter fell by E468.2 million, after retreating by a wider E606.1 million in the last quarter of 2016. Assets acquired in the other investments accounts posted a moderate net inflow of E135.5 million following a E2.425 billion net outflow in the first quarter of 2017, buoyed by pending receivables recorded as trade credits and advances. During the first quarter, government incurred E299.0 million worth of foreign liabilities in loans through drawdowns from existing loan agreements.


FIGURE 20: FINANCIAL ACCOUNT; MARCH 2016 - MARCH 2017

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5.1 Monetary Policy Statement May 2017On the 26th of May 2017 the Central Bank of Swaziland (the Bank), together with the Monetary Policy Consultative Committee (MPCC), held a meeting to consider the appropriate monetary policy stance for the Bank.

Considering international, regional and domestic economic conditions, and pursuing its price and financial stability mandate, the Bank decided to maintain the discount rate at 7.25 per cent, effective 27 May 2017.

The underlying reasons to keep the discount rate unchang

Documents

CENTRAL BANK OF SWAZILAND · Central Bank of Swaziland Quarterly Review - June 2017 1 CENTRAL BANK OF SWAZILAND QUARTERLY REVIEW JUNE 2017 ... e-mail: [email protected]