EDITORIAL: Interest rates are important, but what does the Bank really think about Eskom?
As in previous monetary policy committee meetings, Bank governor Lesetja Kganyago isn’t likely to tackle this big elephant in the room
Questions about Eskom’s health, or lack of, are never that far from the surface when the Reserve Bank announces its interest-rate decisions. That will probably prove true on Thursday when the monetary policy committee concludes its latest meeting. But as in previous meetings, governor Lesetja Kganyago isn’t likely to tackle this big elephant in the room directly, and when he reads out the committee’s decision, he is likely to stick to broad warnings about the potential impact of recent tariff increases on the inflation outlook The wording probably wouldn’t have changed much from the previous meeting in March when the Bank talked about key upside risks being “rising administered prices including electricity and water tariffs”, together with domestic food prices and international oil prices. While “electricity constraints” figured among the risks to growth — it would be strange if they didn’t as the period prior to that gathering had been dominated by sustained blackouts — this was i...
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