MAMOKETE LIJANE: Bank should not wait too long before normalising rates
SA’s vaccine rollout needs to gather pace so the country does not lag behind the rest of the world in tightening
The Covid-19 shock spurred an unprecedented global monetary policy response — in speed and magnitude — as central banks tried to support economies as best they could. The median central bank rate of the 38 central banks tracked by the Bank of International Settlements is now at historic lows.
The SA Reserve Bank was no exception. Its monetary policy committee (MPC) cut rates by 300 basis points in the wake of the crisis and implemented various measures to ease liquidity conditions across financial markets. However, as economic activity returns to normal, so will monetary policy rates. The timing and pace of monetary policy normalisation will be one of the most important dynamics for central banks and economies to manage...
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