Lesetja Kganyago - in his debut policy meeting as Reserve Bank governor - kept South African borrowing costs unchanged at 5.75 percent, reinforcing his pledge for continuity. “The committee remains of the view that interest rates will have to normalize over me,” the governor said. “The timing of future interest-rate increases will be dependent on a range of factors, including the evolution of inflation expectations, the speed of normalization of monetary policy in the U.S. and the state of the domestic economy.”
Japan officially slipped back into recession as the world’s third-biggest economy contracted 1.6 percent in the third quarter. Japanese Prime Minister Shinzo Abe called a snap election in a bid to extend his term and also delayed the planned sales-tax increase for 18 months.
Markets remained wary as the China flash HSBC/Markit manufacturing purchasing managers’ index showed factory output contracted in the world’s second-biggest economy for the first time in six months. Europe contributed to the gloomy data as the private sector in its biggest economy, Germany, grew at its slowest rate in 16 months.
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