In its second meeting in a row, the Monetary Policy Committee of the South African Reserve Bank showed unity i leaving the interest rates in South Africa unchanged with the Repo Rate at 6.75% dictating a prime lending rate by the major banks of 10.25%.
Fior many it came as no surprise as the the inflation rate hovers steadily below the 5% mark and within the given bandwidth of 3% – 6%. However, one can see a cautious yet conservative MPC. A more future-bound and aiming at clairvoyance MPC could have sent a message by cutting the repo rate by 0.25% i order to anticipate Moody’s postpone rating decision and to therefore cement already an attraction to stay or invest into the Rand; especially in light of the recent rates decision of the Fed in the US.
The next meeting will be after the election and will have to deal with the aftermaths of what is to come, the biggest blow to sanity in South Africa!