EDITORIAL: MPC move reflects risk sensitivity
Meeting set up clear tension with data-driven approach to rates
24 March 2025 - 05:00
Do the monetary policy committee’s (MPC’s) decisions depend on the data and its own forecasts? Or do its members depend instead on their perceptions of political and geopolitical risks?
Last week’s MPC meeting set up a very clear tension between the two approaches. In theory, as Reserve Bank governor Lesetja Kganyago frequently points out, the committee’s role is precisely to assess the risks, rather than to depend mechanically on the models. In practice, the latest meeting set this up as a stark dilemma...
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