Rate hikes might be nearly over, but don’t expect a cut any time soon
ALTHOUGH SA may be close to the end of the interest rate increasing cycle, cuts may still be a while away.Reserve Bank deputy governor Daniel Mminele says the "bar to interest rate cuts is high".Speaking at a Rand Merchant Bank/Morgan Stanley Investor Conference on Tuesday, Mminele said there was no guarantee that the causes of reduced risks to the inflation outlook would persist in coming quarters, and that some of the factors that had improved the inflation outlook — including the rand — could reverse quickly.In this case, "the view that we are close to the end of the tightening cycle would need to be reassessed", Mminele said.The Bank left rates unchanged in September — the third consecutive time it left the repo rate on hold at 7%.Mminele reiterated that continued vigilance was warranted and that the Bank’s monetary policy committee, which sets interest rates, would "more than ever" need to continue basing its decisions on forthcoming data and events.In recent months several dev...
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