Monetary policy in the SADC region : the nexus between price stability and financial stability

Abstract

Historically, most central banks have tended to prioritise price stability over financial stability. The study focused on members of the Southern African Development Community (SADC) from 2009 to 2018. These members were Angola, Botswana, the Democratic Republic of the Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. This study investigated the relationship between price stability and financial stability. Global economic developments, namely global financial crises, have demonstrated that financial instability can occur during periods of price stability. Consequently, it was necessary to quantitatively investigate the nature of the above relationship. There have been instances of global financial crises occurring during periods of low inflation. This study sought to analyse the relationship between these two important central bank objectives, with a focus on the banking sectors of 15 SADC nations. The study was premised on the following research questions: a) How do changes in financial stability indicators affect the inflation rate in the SADC region? b) What is the nature of the causal relationship between price stability and financial stability? The research followed a positivist hypothetico-deductive methodology. Due to the quantitative nature of the variables and the methodology adopted by most empirical studies, it was determined that a quantitative approach was appropriate. The modelling software EViews was utilised. The period covered by the data analysis for the banking sectors of the 15 SADC countries was from 2009 to 2018. The inflation rate was used as a measure of price stability in this study. Capital adequacy ratio, deposits to loans ratio, non-performing loans to total loans ratio, liquidity ratio, return on assets and return on equity are all measures of financial stability. A fixed effects regression model was employed to assess the impact of changes in financial stability indicators on price stability in the SADC region from 2009 to 2018 for SADC member states. The Granger causality test was used to examine the relationship between price stability and financial stability variables. Even though the financial system comprises both banking and non-bank financial institutions, this study was limited to banking institutions. The focus was, therefore, on entities that fall under the financial sector oversight mechanisms of central banks. The study reveals a significant negative relationship between the liquidity ratio and inflation, but a significant positive relationship between return on equity and inflation. An R-squared value of 0.5234 indicates that 52.34 per cent of changes in price stability as measured by inflation can be explained by changes in the selected indicators of financial stability. Other indicators of financial stability were deemed insignificant, as evidenced by probability values greater than 0.05 in the model. Non-performing loans to total loans ratio, return on assets and return on equity had a unidirectional causal association with price stability. It was observed that past inflation had a high probability of causing future non-performing loans, while past return on assets and return on equity had a high probability of causing inflation. According to the study's findings, the relationship between price stability and financial stability has significant policy implications, including ensuring that the macro-economic convergence agenda adopts a harmonised approach to financial stability with the same clarity given to price stability, whose convergence criteria are based on an inflation target range of 3-7 per cent. Regional harmonisation of policies aimed at financial stability and a subsequent regard to the same in the macro-economic convergence agenda will ensure, among other things, that monetary policy in the SADC region not only pursues price stability through inflation targeting, but also deliberately and intentionally addresses financial stability issues, which would be assessed at national and regional levels using unified criteria and clearly specified indicators of financial stability.

Ngokomlando, amabhange amakhulu amaningi abejwayele ukubeka phambili ukusimama kwentengo kunokusimama kwezezimali. Lolu cwaningo belugxile kumalungu Omphakathi Wentuthuko YaseNingizimu Afrika (SADC) kusukela ngo-2009 kuya ku-2018, okuyi-Angola, Botswana, Democratic Republic of the Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, iNingizimu Afrika, Swaziland, Tanzania, Zambia kanye ne Zimbabwe. Lolu cwaningo luphenye ubudlelwano phakathi kokusimama kwentengo nokusimama kwezezimali. Intuthuko yezomnotho emhlabeni wonke, okuyizingqinamba zezimali zomhlaba wonke, ibonise ukuthi ukuntengantenga kwezezimali kungenzeka ngezikhathi zokusimama kwentengo. Ngakho-ke, bekudingeka ukuthi kuphenywe ngokwesilinganiso uhlobo lobudlelwano obungenhla. Kube nezimo zezinkinga zezimali zomhlaba ezenzeka ngezikhathi zokwehla kwamandla emali. Lolu cwaningo belufuna ukuhlaziya ubudlelwano phakathi kwalezi zinhloso ezimbili ezibalulekile zamabhange amakhulu, kugxilwe emikhakheni yamabhange yamazwe ayi-15 e-SADC. Ucwaningo belusekelwe emibuzweni yocwaningo elandelayo: c) Ushintsho lwezinkomba zokusimama kwezezimali lulithinta kanjani izinga lokwehla kwamandla emali esifundeni se-SADC? d) Luyini uhlobo lobudlelwano oluyimbangela phakathi kokusimama kwentengo nokusimama kwezezimali? Ucwaningo lulandele indlela yencazelo ehlongozwayo yendlela yesayensi. Ngenxa yesimo sobuningi bezinto eziguquguqukayo kanye nendlela eyamukelwa ucwaningo oluningi olunobufakazi, kwanqunywa ukuthi indlela yokulinganisa yayifanelekile. Isofthiwe yesifanekiso se-E-Views sasetshenziswa. Isikhathi esihlanganiswa nokuhlaziywa kwemininingwane yemikhakha yamabhange yamazwe ayi-15 e-SADC sasuka ngo-2009 kuya ku-2018. Izinga lokwehla kwamandla emali lisetshenziswe njengesilinganiso sokusimama kwentengo kulolu cwaningo. Isilinganiso sokulingana kwemali mboleko, isilinganiso sediphozithi emalini ebolekiwe, imali ebolekiwe engasebenzi esilinganisweni sesamba semali mboleko, isilinganiso semali mboleko, imbuyiselo yezimpahla kanye nembuyiselo ekulinganeni konke kuyizinyathelo zokusimama kwezezimali. Kusetshenziswe isifanekiso sokwehla kwemiphumela engaguquki ukuze kuhlolwe umthelela wezinguquko zezinkomba zokusimama kwezezimali ekusimameni kwamanani esifundeni se-SADC kusukela ngo-2009 kuya ku-2018 emazweni angamalungu e-SADC. Ukuhlolwa komqondo wezibalo ka-Granger kwasetshenziswa ukuhlola ubudlelwano phakathi kokusimama kwentengo nokuhlukahluka kokusimama kwezimali. Nakuba uhlelo lwezezimali luhlanganisa izikhungo zezimali zamabhange nezingezona ezamabhange, lolu cwaningo belukhawulelwe ezikhungweni zamabhange kuphela. Ngakho-ke kwakugxilwe ezinhlanganweni eziwela ngaphansi kwezindlela zokwengamela umkhakha wezezimali wamabhange amakhulu. Ucwaningo luveza ubudlelwano obubi obubalulekile phakathi kwesilinganiso semalimboleko kanye nokwehla kwamandla emali, kodwa ubudlelwano obuhle obubalulekile phakathi kwembuyiselo kukulingana nokwehla kwamandla emali. Inani eliyisikwele esingu-R lika- 0.5234 libonisa ukuthi u-52.34% wezinguquko ekusimameni kwentengo njengoba kulinganiswa nokwehla kwamandla emali kungachazwa ngezinguquko zezinkomba ezikhethiwe zokusimama kwezezimali. Ezinye izinkomba zokusimama kwezezimali zithathwe njengezingabalulekile, njengoba kufakazelwa amanani okungenzeka angaphezu kuka-0.05 esifanekisweni. Izimali mboleko ezingasebenzi esilinganisweni sesamba semali mboleko, imbuyiselo ezimpahleni kanye nembuyiselo ekulinganeni kube nokuhlotshaniswa kwesizathu esingaqondile nokusimama kwentengo. Kwaqashelwa ukuthi ukwehla kwamandla emali esikhathini esidlule kwakunethuba elikhulu lokubangela imali ebolekiwe engasebenzi esikhathini esizayo, kuyilapho imbuyiselo yesikhathi esidlule yezimpahla nembuyiselo kukulingana kwakunethuba elikhulu lokubangela ukwehla kwamandla emali. Ngokwalokho okutholwe ocwaningweni, ubudlelwano phakathi kokusimama kwentengo nokusimama kwezezimali bunemithelela ebalulekile yenqubomgomo, okuhlanganisa nokuqinisekisa ukuthi uhlelo lokufana komnotho wamazwe ahlukene lusebenzisa indlela evumelanayo yokusimama kwezezimali nokucaciswa okufanayo okunikezwa ukusimama kwentengo, okusekelwe ekuguquguqukeni kwentengo, uhla okuhlosiwe ngalo kusuka ku-3 kuya ku-7%. Ukuvunyelaniswa kwezinqubomgomo zesifunda okuhloswe ngazo ukusimama kwezezimali kanye nokubhekwa okulandelayo ohlelweni lokufana komnotho wamazwe ahlukene kuzoqinisekisa, phakathi kokunye, ukuthi inqubomgomo yezimali esifundeni se-SADC ayigcini nje ngokuphishekela ukusimama kwamanani ngokuqondisa ukwehla kwamandla emali, kodwa futhi ngamabomu nangenhloso ibhekana nezindaba zokusimama kwezezimali, ezizohlolwa emazingeni kazwelonke nawesifunda kusetshenziswa indlela yokunquma ebumbene kanye nezinkomba ezicaciswe ngokucacile zokusimama kwezezimali.

Ho latela nalane, boholo ba dibanka tse bohareng di na le tshekamelo ya ho etelletsa pele botsitso ba theko ho feta botsitso ba ditjhelete. Thuto ena e ne e tsepamisitse maikutlo ho Setjhaba sa Dinaha tse ka Borwa ho Afrika (SADC) ho tloha ka 2009 ho isa 2018, e leng Angola, Botswana, Democratic Republic of the Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, Afrika Borwa, Swaziland, Tanzania,Zambia le Zimbabwe. Thuto ena e ile ya batlisisa kamano pakeng tsa botsitso ba theko le botsitso ba ditjhelete. Dintshetsopele tsa moruo wa lefatshe, e leng mathata a ditjhelete a lefatshe, di bontshitse hore ho se tsitse ha ditjhelete ho ka etsahala nakong ya botsitso ba ditheko. Ka lebaka leo, ho ne ho hlokahala ho batlisisa ka mokgwa wa mofuta wa kamano e ka hodimo. Ho bile le diketsahalo tsa mathata a ditjhelete a lefatshe a hlahang nakong ya theko e tlase. Thuto ena e ne e batla ho sekaseka dikamano dipakeng tsa dipheo tsena tse pedi tsa bohlokwa tsa banka e bohareng, ho tsepamisitswe maikutlo ho makala a dibanka a dinaha tse 15 tsa SADC. Thuto e ne e itshetlehile ka dipotso tse latelang tsa dipatlisiso: e) Ho fetoha ha matshwao a botsitso ba ditjhelete ho ama sekgahla sa infleishene jwang lebatoweng la SADC? f) Ke mofuta ofe wa kamano ya sesosa pakeng tsa botsitso ba theko le botsitso ba ditjhelete? Dipatlisiso di ile tsa latela mokgwa wa ho bokella dintlha tse ngata ka ho sebedisa mekgwa ya ho etsa dipatlisiso e fapaneng. Ka lebaka la sebopeho sa palo ya mefutafuta le mokgwa o amohetsweng ke dithuto tse ngata tse nang le matla, ho ile ha etswa qeto ya hore mokgwa wa dipalopalo o nepahetse. Ho ile ha sebediswa sete ya ditaelo tse sebediswang ho tsamaisa khomphutha ya mohlala wa E-Views. Nako e akareditsweng ke tlhahlobo ya dintlha bakeng sa mafapha a dibanka a dinaha tse 15 tsa SADC e ne e le ho tloha 2009 ho isa 2018. Sekgahla sa infleishene se sebedisitswe e le tekanyo ya botsitso ba theko thutong ena. Karolelano ya tjhelete ya banka mabapi le thepa e lekantsweng ya kotsi le mekoloto ya hona jwale,depositi ho dikadimo karolelano, mekoloto e sa sebetseng ho kakaretso ya dikadimo, karolelano ya mokoloto, phaello ya thepa le ho kgutla ha tekano kaofela ke mehato ya botsitso ba ditjhelete. Ho ile ha sebediswa mohlala o tsitsitseng wa phokotso ya maemo ho lekola tshusumetso ya diphetoho tsa matshwao a botsitso ba ditjhelete mabapi le botsitso ba ditheko sebakeng sa SADC ho tloha 2009 ho isa 2018 bakeng sa dinaha tseo e leng ditho tsa SADC. Teko ya Granger ya sesosa e ile ya sebediswa ho hlahloba kamano pakeng tsa botsitso ba theko le maemo a tsitsitseng a ditjhelete. Leha tsamaiso ya ditjhelete e kenyelletsa ditsi tsa ditjhelete tsa banka le tseo e seng tsa banka, thuto ena e ne e lekanyeditswe ho ditsi tsa banka feela. Ka hona, ho ne ho tsepamisitswe maikutlo hodima mekgatlo e welang tlasa mekgwa ya tlhokomelo ya lefapha la ditjhelete tsa dibanka tse bohareng. Thuto ena e senola kamano e mpe dipakeng tsa karolelano ya ditjhelete le infleishene, empa kamano e ntle e teng dipakeng tsa phaello ya tekano le infleishene. Palo ya R-squared ya 0.5234 e bontsha hore 52.34% ya diphetoho tsa botsitso ba theko e lekantsweng ke infleishene e ka hlaloswa ka diphetoho ho matshwao a kgethilweng a botsitso ba ditjhelete.Dipontsho tse ding tsa botsitso ba ditjhelete di ne di nkuwa di se na thuso, jwaloka di bontshitsweng ke ditekanyetso tse kgolo ho feta 0.05 moetsong. Dikadimo tse sa sebetseng ho palo ya dikadimo kaofela, ho kgutlisa thepa le ho kgutlisa tekano ho bile le kamano e sa lebellwang ya mabaka le botsitso ba theko. Ho ile ha hlokomelwa hore ho infleishene ya nako e fetileng e bile le monyetla o moholo wa ho baka dikadimo tse sa sebetseng nakong e tlang, athe puseletso ya nakong e fetileng ya thepa le phaello ya tekano e ne e e na le monyetla o moholo wa ho baka infleishene.Ho ya ka diphumano tsa thuto kamano pakeng tsa botsitso ba theko le botsitso ba ditjhelete di na le ditlamorao tse kgolo tsa leano, ho kenyelletsa le ho netefatsa hore lenane la kgokahanyo ya moruo la thuto ya moruo ohle le amohela mokgwa o lumellanang wa botsitso ba ditjhelete ka ho hlaka ho tshwanang ho fanwang ka botsitso ba theko, ba mekgwa ya ona ya ho kopanya e itshetlehileng ka lebelo la infleishene la sepheo sa 3 ho isa ho 7%.Ho dumellana ha lebatowa ha maano a reretsweng botsitso ba ditjhelete le ho ela hloko lenane la kgokahanyo ya moruo ho tla netefatsa, hara tse ding, hore leano la ditjhelete lebatoweng la SADC ha le latele botsitso ba ditheko feela ho lebisitswe ho infleishene, empa le ho sebetsana le ditaba tsa ditjhelete ka boomo le ka moreo. ditaba tsa botsitso, tse tla hlahlojwa maemong a naha le a lebatowa ho sebediswa mekgwa e kopaneng le matshwao a hlakileng a botsitso ba ditjhelete.