MPC warns of future hikes
The Bank’s outlooks for inflation and economic growth have deteriorated since its last monetary policy meeting
The Reserve Bank issued a stern signal on Tuesday that it might start hiking interest rates again if higher global oil prices or a hit to the rand were to cause above-target inflation rates to persist into next year. The Bank’s monetary policy committee decided unanimously to keep rates on hold as expected, and repeated its earlier view that it might be reaching the end of the rate-hiking cycle. This despite the fact that the shorter-term inflation outlook has deteriorated because of higher fuel and food prices, with the average inflation rate now expected to stay above 6% in 2017. But the committee made it clear that it might have to reassess its view if the longer-term outlook for inflation were to deteriorate. Although Bank governor Lesetja Kganyago said the committee had not discussed a rate hike, he emphasised that: “Just because we said we might be reaching the end of the tightening cycle does not mean that the cutting is around the corner.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.