dlk001
Executive Member
The South African Reserve Bank opted on Thursday to keep its policy rate unchanged at 9%, citing moderating inflation expectations and invoking revisions in its inflation forecasts in support of the decision. The spectre of the surging current account deficit was downplayed as an immediate driver of inflation, but the Bank clearly remains wary of the freedom with which South Africans are borrowing to fund their spending habits.
Mboweni warned this afternoon that the decision to keep interest rates unchanged at 9% was a difficult one, before announcing this, he said the following:
* Inflation not seen breaching target.
* Outlook has improved since last quarter.
* Current-account gap widened significantly, but it is adequately financed.
* Outlook improves on rate tightening
* Rand relatively stable since last MPC meeting
* Trade deficit may have dobled in fourth quartet
* The outcome with regard to consumer and producer prices have been below expectations - mainly because of moderating food and oil prices. Nevertheless long-time risks to the inflation outlook remain. There are only tentative signs that consumer demand is abating
* Fourth quarter oil imports appear "exceptional". Risk from the oil price has dropped. But imports are likely to be sustained at these levels.
* Consumer spending still robust.
* Global rate cycle may have peaked.
* Too early to judge the spending slowdown.
* Car purchases are slowing.
* House prices are rising at a brisk price.
Most economists polled by Reuters and Bloomberg were correct in their predictions that interest rates would stay put .The Bloomberg poll has fourteen out of twenty analysts betting on a no-change decision; six said another 50 basis point hike was likely.
Mboweni warned this afternoon that the decision to keep interest rates unchanged at 9% was a difficult one, before announcing this, he said the following:
* Inflation not seen breaching target.
* Outlook has improved since last quarter.
* Current-account gap widened significantly, but it is adequately financed.
* Outlook improves on rate tightening
* Rand relatively stable since last MPC meeting
* Trade deficit may have dobled in fourth quartet
* The outcome with regard to consumer and producer prices have been below expectations - mainly because of moderating food and oil prices. Nevertheless long-time risks to the inflation outlook remain. There are only tentative signs that consumer demand is abating
* Fourth quarter oil imports appear "exceptional". Risk from the oil price has dropped. But imports are likely to be sustained at these levels.
* Consumer spending still robust.
* Global rate cycle may have peaked.
* Too early to judge the spending slowdown.
* Car purchases are slowing.
* House prices are rising at a brisk price.
Most economists polled by Reuters and Bloomberg were correct in their predictions that interest rates would stay put .The Bloomberg poll has fourteen out of twenty analysts betting on a no-change decision; six said another 50 basis point hike was likely.