While I am not qualified to comment on RMB chief economist Ettienne le Roux’s detailed view on whether a cut in rates would increase demand under the present conditions, or whether fiscal policy is currently expansionary or contactionary, it seems to me he has overlooked one of the arguments against a cut. The argument is that doing so would make the carry trade and rand instruments less attractive and consequently increase imported inflation as the rand drops. Fuel is an obvious example. That said, I have never understood the argument that higher interest rates contain inflation when our inflation is led by administered prices and is therefore cost push rather than demand pull. Sydney KayeCape Town
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