South Africa Financial Conditions Index (Monthly Report) - June 2014

Financial conditions have generally eased substantially since the beginning of 2013. Although higher inflation, coupled with interest rates which remained on hold was a key reason for this, the drop in the value of the rand and strong equity market performance also contributed to the easing of financial conditions. Latest data for April 2014 reveal that conditions have tightened slightly compared with the previous month. However the easing trend in financial conditions which started in mid- 2010 still appears to be intact. Compared with a year ago, two of the constituent variables were showing a slight tightening of financial conditions in the economy, while three were less tight than a year ago.

What is the SA Financial Conditions Index Monthly Report?

The Financial Conditions Index is a 4-page monthly overview of the financial conditions as measured by five variables: real interest rates; the yield curve; earnings yields on shares; excess money supply growth; and real effective exchange rate change. The Financial Conditions Index (FCI) can signal overall financial conditions to economic agents, and can serve as rough indicator for the conduct of monetary policy – especially in times of high financial market volatility. The FCI gives a comprehensive view on the financial variables likely to impact on both future inflation and economic activity levels.

How do I access the report?

For a limited time, the report is available at no cost. To view and download the report in PDF, visit www.easydata.co.za and register for a free account.

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