RON DERBY: Mr Governor, there's no better time to cut interest rates
Next month, the Reserve Bank should use the little space it has to cut interest rates - given that the world's leading central bankers are clearly charting a course to higher lending rates over the next couple of years as they countenance the return of the dreaded inflationary dragon. Economic theory dictates that tightening monetary policy in the developed world means that their currencies will strengthen and emerging-market currencies such as the rand will weaken. Given our import bill, a weak rand means higher inflation, meaning the central bank will have no option but to follow the Western world and raise our borrowing costs. But as the situation stands, the US Federal Reserve, the Bank of England and the European Central Bank are still talking about just when the great wave of normalisation of monetary policy will move into full swing. In this window, we've had a currency strengthen to levels last seen in February 2015, about 10 months before President Jacob Zuma's mad crusade ...
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