Monetary policy and COVID-19: what to expect from the SARB
In light of Covid-19, this blog attempts to unpack the potential policy position of the SARB as we build up to the MPC meeting on the 19th of March. Given its detrimental impact on global growth, coupled with South Africa’s growth decline over the last 2 quarters, I believe that the likelihood of the MPC decreasing the repo rate by 25 basis points is high. However, evidence also points to a potentially unchanged repo rate, if it believes that a repo-rate decrease could bring about unintended consequences relating to capital flight and/or exchange rate depreciation