EDITORIAL: The doves prevail but the talk is hawk
Global financial conditions are likely to stay tight and markets risky for emerging market currencies
When market and media players speak of hawks and doves, Reserve Bank governor Lesetja Kganyago always retorts that the monetary policy committee is not an aviary. Fortunately, or unfortunately, no-one takes much notice. And last week’s meeting was one of those that showcased both in what some called a “hawkish hold”.
It was not too hard to see why the three “doves” prevailed over the two “hawks”, with the committee opting to hold the benchmark repo rate at 8.25%. Monetary policy decisions have to be made based on the future not the past, so last week’s lower-than-expected June inflation figures would not have tipped the decision. But the Bank has revised its headline inflation forecast for 2023 down to 6%, from 6.2% during the committee’s last meeting in May. Forecasts for the next two years are lower too, reflecting lower food, fuel and core inflation forecasts. ..
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