This paper quantifies the effect of fiscal transfers on the trade-off between social relief and debt accumulation, and discusses the economic growth and fiscal implications of different combinations of expanded social support and funding choices. Given South Africa’s already high level of...

This white paper decomposes sovereign yields into expectations of future average short term rates and a term premium. We estimate that the term premium in South African sovereign bonds is lower than after the onset of the COVID pandemic, but still meaningfully higher than its historical average....

South Africa’s sovereign yield curve is one of the steepest in the world. We show that South Africa’s curve has steepened over recent years and that this can be explained by an increase in the term premium embedded in long rates. We also show that marketimplied long term neutral interest...

This paper presents a primer on assessing South Africa’s optimal inflation target and the implications of the economy’s structural characteristics for the conduct of monetary policy. The paper assesses what would need to be done to lower the inflation target without imposing a...

The Covid crisis saw significant declines in market liquidity and calls for central banks to step in. Most research into foreign exchange (FX) liquidity does not consider a large cross-section of emerging market currency pairs or include the rand (ZAR) in its analysis, so this note sheds light...