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...