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December's rate meeting canned

Nov 17 2009 16:20

Johannesburg - The South African Reserve Bank's Monetary Policy Committee (MPC) has decided to revert to the pattern of only meeting every alternate month, governor Gill Marcus said in a statement on Tuesday.

"Should the need arise, this frequency will be reconsidered," the MPC statement read. The MPC's scheduled meeting for December 16 and 17 has been cancelled, with the next date being January 25 and 26.

Against the background of heightened volatility and uncertainty in international financial markets and the severe downturn in the global economy, the MPC decided earlier in 2009 it would be appropriate to meet more frequently to assess changing circumstances so that it could act appropriately when necessary.

"Although risks still remain, the global environment appears to have stabilised somewhat. The MPC has therefore decided to revert to the previous pattern of meeting every alternate month. Should the need arise, this frequency will be reconsidered," it said.

Rates unchanged

The MPC also announced on Tuesday to keep the repo rate unchanged at 7% - in line with consensus expectations.

"They kept interest rates unchanged as expected," said Doret Els, economist at Quantum Asset Management. "She [Marcus] had a professional demeanour. I like the fact that what was discussed at the MPC meeting was discussed at the [public announcement]. She reaffirmed that inflation targeting is the main tool used by the Reserve Bank."

The tone of the statement was always going to be important and in her first public appearance as governor, Marcus adopted a market-friendly stance, indicating she was not bound by any political value and that the bank would not be targeting a particular rand level.

- I-Net Bridge

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Prime Rate
Nov 18 2009 13:35 Report this comment

Commercial banks must bring Prime down by 2% and SARB must intervene. Just like the intervention that is needed for Retailers, Realtors, cars, white goods: we need REAL sales TO BOOST DEMAND and increase customers etc Only reductioon in prime rate and reduced pricing of houses cars white good etc will brfeak the cycle But shops 7 manuafcturers and SMME;'s first need a big helop from commercial banks DOWN with prime and we need to 25% - 50% reduction the the cost of goods for sale

Bennie @ George
Nov 18 2009 08:44 Report this comment

The fact that you do not know kind of proves my point. Does it not? Afterall BUSA also said that they would have liked a drop in interest rates to stimulate economic activity. Look at the economy as whole, not just how a rate cut affect your pocket.

mark bristow
Nov 18 2009 08:27 Report this comment

our non swimming friends are already on holiday...poor to middle class people are losing there homes as we speak, if all the money wasted on corruption and hotel bills was channelled into security and medical we would not be here.Lets blame apartheid...

George
Nov 18 2009 08:18 Report this comment

@Bennie - which planet are you from?

Bennie
Nov 18 2009 08:01 Report this comment

The ignorance of people on this website is as glaring as staring into the sun. Investments are driven by economic activity, which in turn is driven by business, that require low rates to invest in capital to create jobs! As for cutting back expenses, its ignorant to say people should cut back on luxuries as MOST people who are suffering do not have luxuries to cut back on, they want to save the roof over their head. Please read a book on macro econimics before commenting on this article!

Jim
Nov 18 2009 08:00 Report this comment

The pensioners take the brunt with low rates, and find it hard to survive, as the costs to live just go up. Elec, food, nothing has come down, other than their income. 2010 will see the turn of interest rates in an upwards direction.

vince
Nov 17 2009 18:53 Report this comment

Did she actually cancel the december meeting? I understood her to say they would meet every 2 months in 2010!

Jan
Nov 17 2009 18:26 Report this comment

Waht about the poor pensioners already getting almost nothing on their investments? No, she did the right thing. People should think think twice before buying houses and cars they cannot afford in the first place. Balance is the key. No more drops in the interest rate please!!


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