Lesetja Kganyago’s comments dampen expectations for rate cut in 2019
Reserve Bank governor says Monetary Policy Committee welcomes lower inflation expectations, but wants to see more evidence of lower future prices
The SA Reserve Bank is steadfast that it wants to see inflation expectations anchored at the 4.5% midpoint of its target range, governor Lesetja Kganyago said. While the central bank unexpectedly raised its key rate to 6.75% in November, its current policy stance remains accommodative with the benchmark rate still below neutral, Kganyago said in an interview last week with Bloomberg TV in Washington. Consumer inflation was below the target midpoint for the second straight month in February (though economists have told Business Day it is expected to be closer to the midpoint for March). It will stay within the 3%-6% range until at least the end of 2021, according to central bank forecasts. The monetary policy committee (MPC) sees inflation averaging 5.3% in 2020 and 4.7% in 2021. The committee welcomes the fact that inflation expectations have declined, but it wants to see more evidence of lower future prices, Kganyago said. “For you to have lower interest rates, you have got to...
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.