Inflation tamed; risks remain
Monetary policy not a cure-all for economy: Reserve Bank deputy governor
With inflation finally reined in, SA can breathe a sigh of relief, but global headwinds and geopolitical factors are lingering concerns for the rand and investment inflows. Daniel Mminele, a deputy governor at the Reserve Bank, told Business Times in an interview on Wednesday that SA's inflation profile had improved on lower oil prices. The Reserve Bank at the January monetary policy committee (MPC) meeting revised its oil price assumption down by almost $10 a barrel to levels of $62 for this year and $65 for the two outer years, even though the price did firm in January. Some economists see the Reserve Bank's decision to hike interest rates by 25 basis points to 6.75% in November last year as a policy error. They cite conflicting messaging from the MPC - that in November the Reserve Bank's model projected three further interest rate hikes by 2020, but the Bank is now forecasting just one hike, with the MPC significantly revising its inflation forecast - all within two months. The m...
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