South African Reserve Bank

November 21, 2013

For an eighth straight time, a meeting of South Africa’s Monetary Policy Committee decided to keep its repo rate at 5.0%.  Officials are between the rocks of inflation precariously near the target’s upper limit and the potential for more rand depreciation because of Fed tapering that will start either sooner or later and the hard place of a fragile economy that prompted central bank officials to revised projected GDP expansion for 2013 and 2014 both downward.  A statement released by the SARB details these problems.

From a peak of 12% prior to December 2008, the key interest rate was cut by 50 basis points that month, 450 bps in 2009, 150 bps in 2010 and 50 bps in July 2012 to its present level of 5.0%, which is below the latest 12-month advance in consumer prices.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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