The South African Reserve Banks Monetary Policy Committee’s decision to leave the repo rate unchanged at 7% per annum is a positive step under the circumstances.
The SARB is doing well to move away from the utilisation of interest rates to keep inflation within its target range. Interest rate hikes should only be applied as a tool in instances where we experience excess demand, which we clearly do not have at the moment.
We are still suffering the consequences of previous decisions by the SARB to increase interest rates. The latter contributed to increased inflation, higher unemployment figures and lower economic growth.
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Andre Venter at 083 251 3274.