RESERVE BANK POLICY
Interest rates staying put despite rand slide
Reserve Bank deputy governor Daniel Mminele says policymakers will respond to the rand’s weakness only if it feeds through to the wider economy
SA’s embattled consumers and companies look set to be spared another interest rate hike in the wake of the rand’s slide to a two-year low against the dollar. Reserve Bank deputy governor Daniel Mminele told Bloomberg on Monday that policymakers, who have managed to keep inflation within the 3%-6% target band for more than a year, would only respond to the rand’s weakness if it fed through to the wider economy. "We would not overreact to initial price pressures and would be guided by our collective judgment and assessment of how we see knock-on and second-round effects of any price pressures that could then contribute to inflation." The rand was caught in the crossfire as Turkey’s financial crisis spread, seeing its biggest fall since the depths of the global financial crisis a decade ago, breaking through R15/$ in early trade on Monday. It pared losses later, to an intraday best of R14.1805, but fell again to R14.4065 by 6.30pm, about 14% lower than where it began 2018. This compare...
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.