MAMOKETE LIJANE: Reserve Bank’s legendary caution comes at a cost
The committee could have given the economy support by starting to cut earlier and faster
27 November 2024 - 05:00
Before the current easing cycle started I thought the Reserve Bank might cut rates by 1.5 percentage points, so the repo rate would move from 8.25% to 6.75%. I thought inflation would bottom at a level materially lower than what the monetary policy committee (MPC) was forecasting, and this is exactly what happened.
As 2024 progressed, inflation outcomes continuously surprised to the lower side. Core inflation was depressed by a stronger rand and lower goods prices. My favourite example of this phenomenon is car prices, for which inflation here has fallen to a mere 2.9% from 8.5% in August 2023. ..
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