Monetary Policy

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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

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To hike or not to hike interest rates?

The South African Reserve Bank (SARB) has a difficult decision to make ahead of its Monetary Policy Committee (MPC) meeting and announcement on Thursday 17 July 2014. It needs to decide whether or not to hike interest rates, and if so, by how much. This is against the backdrop of a grim macro-economic environment.Currently, the inflation rate stands at 6.6%, clearly outside of the SARB’s inflation target range. At the same time GDP growth has fallen into negative territory at minus 0.6%.

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