Lukanyo Mnyanda Editor: Business Day

Unsurprisingly, the Reserve Bank’s interest-rate decision last week has generated a large amount of debate among economists, who might from now on find it much harder to read its decisions. Whether this is a good thing or not is open to question. There is a view that the best central banks are the boring and predictable types, allowing economic players to plan effectively. In an article published in the Financial Times six years ago, Philip Hilderbrand, the former head of the Swiss central bank, quoted Mervyn King, former governor of the Bank of England, as saying “boring is best” as far as policymaking was concerned. Of course, he went on to note that in the aftermath of the global financial crisis, central banking was anything but boring, characterised by negative interest rates in major economies such as the eurozone and Japan, quantitative easing, or money printing, and in the case of Switzerland, the imposition of a currency cap. Until the last couple of meetings, SA had one of...

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