Economists see rates at record lows for longer amid Reserve Bank caution
MPC keeps benchmark interest rate steady even as it downgrades inflation forecast for 2021 slightly
In another split decision the Reserve Bank’s monetary policy committee (MPC) left the benchmark interest rate unchanged on Thursday, even as two members of the committee voted for a cut and it downgraded its inflation forecast for 2021 slightly.
Economists said the Bank’s caution could mean rates remain at record lows for longer, particularly if inflation proves lower than its forecasts and economic growth into next year disappoints. The decision not to act came even as the Bank described risks to inflation as being to the downside in the short term, citing low oil prices, contained food inflation and the lack of a pass-through from the rand’s weakness in 2020...
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