MegaBanner-Right

MegaBanner-Left

LeaderBoad-Right

LeaderBoard-Left

Home » Industry News » South Africa’s central bank cautious about more rate cuts

South Africa’s central bank cautious about more rate cuts

The South African Reserve Bank (SARB) is taking a cautious approach to monetary policy as risks to the inflation outlook are on the upside, deputy governor Daniel Mminele said.

South Africa’s consumer price inflation stood at 4.8 percent year-on-year in August. Statistics South Africa is due to publish the September print on Wednesday.

Mminele said several factors present upside risks to inflation, including a volatile rand exchange rate, the possibility of a larger electricity tariff increase and higher labour costs.

“Amid such elevated uncertainties, and despite the subdued nature of domestic demand, it is not clear how much space exists, if at all, for additional policy rate cuts by the (Monetary Policy Committee) in the coming quarters,” Mminele said in a speech posted on the bank’s website on Tuesday.

“If anything, domestic financial market indicators seem to broadly echo the SARB’s view that the uncertain environment is forcing a cautious approach to policy.”

The central bank surprised markets in September by leaving the benchmark lending rate unchanged at 6.75 percent following a 25 basis point cut in July, saying inflation expectations anchored towards the top end of the bank’s 3-6 percent target band.

Mminele said monetary policy decisions “now more than ever”, had to be data-dependent.

“We prefer not to surprise markets,” he said referring to the September rates decision.

“Yet in a fluid environment, where even small changes in the balance of risks can tip the policy scales one way or another, it is not possible to systematically come up with fully predictable policy decisions.”

 


 

Source

CNBCAFRICA

To enquire about Cape Business News' digital marketing options please contact sales@cbn.co.za

Related articles

Green Hydrogen: Powering SA’s energy and economic future

Green hydrogen is the fuel of the future and will have a major role to play in powering South Africa’s growth and employment prospects. This...

Transport Minister outlines urgent reforms to get SA back on track

South Africa’s transport and logistics sector has long been recognised as a key obstacle to economic growth – but change is underway. In the...

MUST READ

Strategic co-location of IFAT Africa and analytica Lab Africa to boost...

IFAT Africa and analytica Lab Africa will be co-located at the Gallagher Convention Centre this year to optimise the synergies across the laboratories, science...

RECOMMENDED

Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.