Market decries state’s lack of urgency on economy
Reserve Bank holds rates amid budget delay and absence of key policy decisions
The Reserve Bank kept interest rates on hold this week on a day it emerged the cabinet had held back from making key policy decisions and that the medium-term budget would be delayed - moves read by the market as illustrative of a complete lack of urgency on the part of the government about moving the economy forward.
Economists believe the monetary policy committee (MPC), which flagged "this persistently uncertain environment" as a risk to inflation and dashed hopes of a rate cut anytime soon, will wait and see how and whether the government tackles the Eskom and fiscal/budget crises over the next couple of months and how ratings agencies and bond and currency markets react...
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