MONETARY POLICY
Interest rate cut unlikely this week, say analysts
Ongoing risks are likely to trump the stronger rand and a contained inflation
The strong rand and a contained inflation rate within the 3%-6% target band are highly unlikely to result in an interest-rate cut announcement from the South African Reserve Bank’s monetary policy committee on Thursday. At the committee’s previous meeting in November interest rates remained at 6.75%, but Bank governor Lesetja Kganyago flagged a weaker rand, political uncertainty in the build-up to the ANC conference and prospects for further credit-ratings downgrades as areas of great concern. Since then, the rand has strengthened significantly and this was attributed mainly to the election of Cyril Ramaphosa as ANC president. If the ANC wins the 2019 general elections, SA will have Ramaphosa as head of state, a respected businessman, who is largely perceived to be market friendly. However his victory is unlikely to spur interest-rate cuts as political risk still remains. "The rand still remains vulnerable to fiscal and sovereign credit ratings outcomes during the first quarter of 2...
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