The domestic economy started the year on a poor note that was exasperated by continued electricity supply disruptions from the troubled utility provider, Eskom. Manufacturing and mining activity data that was released for January showed sharp contractions over a year-on-year basis and the formal sector's employment numbers for the final quarter of 2014 looked weak as the manufacturing sector contributed the most to job losses over the year. Eskom lost a further vote of confidence when key executives were placed on suspension. The global credit rating agency, Standard & Poor's, responded by cutting Eskom's credit rating from investment grade to junk level. Standard & Poor's did reaffirm South Africa's sovereign credit rating and noted that it is not due to be cut within the next 24 months.

The strong dollar had an adverse effect on commodity prices, which in turn led resource-orientated share prices materially lower during the month. The resources sector declined by 8.5% and together with the industrial sector's 0.5% loss, they led the FTSE/JSE All Share Index 1.3% lower. Financial shares gained 2.3% on the back of buoyant earnings from the local banks. The key event for the month was the sharp depreciation in the rand against the dollar. Expectations of an earlier US interest rate hike sent the rand through the R12/dollar level to a mid-month high of R12.53 before it settled back to close the month at R12.13.

The Reserve Bank's Monetary Policy Committee left interest rates unchanged at their meeting this month, but the Governor's rhetoric became decidedly more hawkish. His inflation forecasts were revised higher to make provision for higher petrol, electricity, food and imported goods prices. Consumer price inflation probably reached a bottom for this cycle in February with the headline number dropping from 4.4% in January to 3.9%. The outcome was, however, higher than expected and core inflation numbers remained sticky. The All Bond Index lost 0.5% during the month as foreigners were net sellers for the second month in a row. Listed property ignored higher bond yields and the sector rose by 2.6%.