Mkhwebane and Buthelezi could be why Reserve Bank is delaying interest rate cut
A 25-basis-points cut in interest rates may have been delayed by attacks on the Reserve Bank’s independence by the deputy finance minister and public protector, BMI Research said in a note on Thursday morning. Due to cooling inflation and weaker-than-expected economic growth, BMI said it had changed its view that the South African Reserve Bank’s monetary policy committee would hold the repo rate at 7% during 2017, saying that it would be cut to 6.75%. SA’s central bank would have made this cut sooner if it did not now have to convince international investors and ratings agencies that it remained an independent body. "As such, even as inflation cools toward the middle of the target band, and growth remains sluggish, the Bank may delay actions until it becomes unimpeachably clear that any cut has been taken for economic reasons, than under political pressure," BMI said. On Wednesday, Reserve Bank governor Lesetja Kganyago applied to the High Court in Pretoria to review and set aside P...
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