Sarb chops rates

rph72

rph72

Executive Member
Joined
Jun 3, 2005
Messages
7,022
Reaction score
1,214
Location
Cape Town
Johannesburg - The South African Reserve Bank's monetary policy committee cut the key repo rate by half a percentage point on Thursday.

The new repo rate is 6%, with the prime lending rate to change to 9.5%

The repo rate is the rate at which the central bank lends to other banks, while the prime lending rate is the benchmark rate at which banks lend to customers.

The decision to leave rates unchanged had been expected.

Most economists have argued for a rate cut to boost the economy in the wake of a favourable inflation outlook, as well as slower gross domestic product growth figures and factory data.

The July rate of change in the consumer price index (CPI) came in at 3.7% from 4.2% in June. On Wednesday, Statistics SA reported annual manufacturing production growth of 7.5%, well down on June's growth rate of 9.3%.

- Fin24.com

http://www.fin24.com/Economy/Sarb-chops-rates-20100909
 
http://www.fin24.com/Economy/Sarb-chops-rates-20100909

The South African Reserve Bank's monetary policy committee cut the key repo rate by half a percentage point on Thursday.

The new repo rate is 6%, with the prime lending rate to change to 9.5%

The repo rate is the rate at which the central bank lends to other banks, while the prime lending rate is the benchmark rate at which banks lend to customers.

The decision to leave rates unchanged had been expected.

Most economists have argued for a rate cut to boost the economy in the wake of a favourable inflation outlook, as well as slower gross domestic product growth figures and factory data.

The July rate of change in the consumer price index (CPI) came in at 3.7% from 4.2% in June. On Wednesday, Statistics SA reported annual manufacturing production growth of 7.5%, well down on June's growth rate of 9.3%.
Click to expand...

To little to late?

But atleast it does helps.
 
Would have loved a 100 basis point drop but am still happy with the 50 point drop!!!
 
They should have done 100 points in my opinion to shock the market into life and quell the Rand strength.
Sorry to say it, but next step for the Rand to the Dollar might be R6.90 which could create a vacuum down to R6.50 and then who knows after that.
The SARB is between a rock and a hard place. The carry trade and the like is looking for yield in emerging markets and with our very liquid Rand, money is going to continue to pour into our juicy bonds.

I might be wrong as things can change very quickly, but probably not before the Federal Reserve starts to lift their rates.
 
BTTB said:
They should have done 100 points in my opinion to shock the market into life and quell the Rand strength.
Sorry to say it, but next step for the Rand to the Dollar might be R6.90 which could create a vacuum down to R6.50 and then who knows after that.
The SARB is between a rock and a hard place. The carry trade and the like is looking for yield in emerging markets and with our very liquid Rand, money is going to continue to pour into our juicy bonds.

I might be wrong as things can change very quickly, but probably not before the Federal Reserve starts to lift their rates.
Click to expand...

So what you're saying is that you'd like foreign investors to disinvest from South africa?
 
alf101 said:
So what you're saying is that you'd like foreign investors to disinvest from South africa?
Click to expand...

Heh there alf. The carry trade is not direct investment. The money can leave as fast as it came in.
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X