The SA Reserve Bank’s decision to keep interest rates unchanged was as close as it could be, with the monetary policy committee (MPC) separated by a single vote, and probably swayed by another grim economic forecast. Governor Lesetja Kganyago and his colleagues said the economy would likely grow just 0.7% in 2018, meaning they have cut the outlook by a full percentage point in the past two meetings. While they still expect expansions of 1.9% and 2% in the next two years, that will now be coming off a much lower base. "Demand pressures are not assessed to pose a significant risk to the inflation outlook," Kganyago said, even as the Bank’s models suggest inflation would peak close to the upper end of the 3%-6% target range. The rand rose the most against the dollar — up 2.4% to R14.35 by 6.58pm on Thursday — since December 18, the day Cyril Ramaphosa won the ANC presidency, as Kganyago also signalled that he would not bow to any political pressure to cut rates.
The MPC decision ...
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