Emergency MPC meeting today

SABC seems to have changed the tone of the report

The Reserve Bank could call an emergency Monetary Policy Committee (MPC) meeting in the face of a worsening inflation outlook.

In an exclusive interview with the SABC, Reserve Bank Governor Tito Mboweni says things have drastically changed since the last MPC meeting three weeks ago. He also hinted at the probability of the MPC hiking interest rates by more than half a percentage point - as has been the case so far.

Mboweni also lamented the continuing increases of administered prices that ignore inflation targeting. He also ruled out the adjusting the mandate of the Reserve Bank. The Central Bank's sole mandate is inflation targeting.

For the full interview watch SABC News at 7pm tonight.
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http://www.sabcnews.co.za/economy/business/0,2172,168370,00.html
 
The Central Bank's sole mandate is inflation targeting.
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And that's more than half the problem. Add to that their lack of imagination meaning they only use interest rate hikes as a solution(which obviously is not working) and you have a bunfight of note just waiting to happen
:(
 
Honestly, how can they believe this is the only answer. They are going to hike us into a recession. And then what? Thats much better than inflation?
 
Can someone please explain to me why in places like the US and UK they lower interest rates to combat inflation, but here they raise them?

I missed economics 101 :D
 
One-trick-tito is going to dazzle us with his incompetence again...
 
tito has tried other means of fighting inflation like lambasting government agencies that raise prices by more than the upper limit of the target band. he has no control over them. so it becomes not an issue of the mandate, but the implementation of the mandate.

i have often seen people lament the SARB's reaction to fighting inflation and how the SARB should look at other ways of doing things. I have never though actually heard anyone articulate these other ways.
 
schitz011 said:
Can someone please explain to me why in places like the US and UK they lower interest rates to combat inflation, but here they raise them?

I missed economics 101 :D
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you really missed ecos 101 because the US and UK don't do that at all. In fact the current credit crisis is a direct result of inflationary pressures in the US leading to increases in the inflation rate.
 
milomak said:
i have often seen people lament the SARB's reaction to fighting inflation and how the SARB should look at other ways of doing things.
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They're the ones earning the big bucks... inflation targeting is their sole mandate. We've got other things to worry about, like wondering how the petro card is going to handle the next fill-up
 
milomak said:
you really missed ecos 101 because the US and UK don't do that at all. In fact the current credit crisis is a direct result of inflationary pressures in the US leading to increases in the inflation rate.
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K, so explain the logic behind raising interest rates, which means the price of everything goes up, salaries don't match the rise in the cost of living and then people are forced to live off credit and this then becomes a viscous circle.
 
Hoof-Hearted said:
They're the ones earning the big bucks... inflation targeting is their sole mandate. We've got other things to worry about, like wondering how the petro card is going to handle the next fill-up
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that last part was a more general comment and not directed at you.
 
icyrus said:
One-trick-tito is going to dazzle us with his incompetence again...
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I know I shouldn't be doing this but I just can't help myself :(

Please oh wise and nobel icyrus could you please show me how Tito is incompetent in his duties..

You do realise the basics of economics where the US is now going through a recession which is forcing the EU the same way, them being our major trading partners means that we are going to be affected as well.

Not to mention that oil prices are shooting through the roof which is why petrol is going up..

Between Tito and Trevour they have kept our economy in fantastic shape and while the current inflation is killing us all they do have sound policies in the back end which is keeping our economy sound... which means we will come out the other side in good condition....
 
schitz011 said:
K, so explain the logic behind raising interest rates, which means the price of everything goes up, salaries don't match the rise in the cost of living and then people are forced to live off credit and this then becomes a viscous circle.
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raise rates. people spend less on discretionary items. the demand for those goods fall. their prices fall. inflation generally falls. that is the theory.
 
schitz011 said:
Can someone please explain to me why in places like the US and UK they lower interest rates to combat inflation, but here they raise them?

I missed economics 101 :D
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It could just be a simple thing like keeping money for the fatcats.

Okay - I can borrow at 4% in the UK and invest here at 9% - make 5% for doing nothing.

The government likes this inflow of money and wants to keep as much of it for the struggle heroes so it stops the PAIs from spending it by hiking the interest rates through the roof. Now the only lot capable of any big jobs (and spending money) is the government and the Charter House mob.

Economics 101 wouldn't help - you need struggle economics 101
 
Albereth said:
It could just be a simple thing like keeping money for the fatcats.

Okay - I can borrow at 4% in the UK and invest here at 9% - make 5% for doing nothing.
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And when the rand depreciates by 10% in a month you lose all that 5% and more.
 
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