The Reserve Bank’s monetary policy committee (MPC) has kept the repo rate unchanged at 5.0% after its three day meeting in Pretoria.
Consensus was for rates to be kept on hold by a survey of leading economists by I-Net Bridge. Of the 12 economists polled‚ only two had expected a 50 basis point rate cut.
Reserve Bank Governor Gill Marcus said the current accommodative monetary policy stance was supportive.
She noted‚ however‚ that risks to economic growth were on the downside‚ while the low point of inflation was believed to have already been reached.
Following are the reactions of leading economists:
COLEN GARROW: Economist at Meganomics:
“This was as expected and the wisest choice given the events at Marikana.”
ADENAAN HARDIEN: Economist at Cadiz Asset Management:
“The decision is in line with our expectations. The Reserve Bank left the door open for further rate cuts if conditions deteriorate in the local economy.”
ELNA MOOLMAN: Economist at Renaissance Capital:
“Our view is that the MPC will keep the current rates for the foreseeable future. However‚ there is a risk that the committee might ease policy further‚ judging by its emphasis on the economic growth outlook rather than inflation.”
MARK KALKWARF: Senior portfolio manager from the Iquad Group:
“This was in line with expectations. She didn’t change the rates for two reasons. One‚ she had to try to balance inflation against employment and she was also uncertain about global markets.” - I-Net Bridge