Stable inflation suggests Reserve Bank should target balanced ...

Business

Stable inflation suggests Reserve Bank should target balanced growth

Economic circumstances make a shift away from protecting the value of the currency desirable

Raymond Parsons

At its meeting this week the SA Reserve Bank’s monetary policy committee (MPC) will again mobilise its unquestioned expertise to review the economic outlook and decide on interest rates. Will there be another reduction, or will rates remain unchanged?

Several economists are expecting the latter, despite the recent better inflation outlook and an easing global interest-rate cycle. And as an emerging market, how does SA manage a highly volatile rand, if at all?

These decisions are never clear-cut because management of the repo rate cannot, even nowadays, be based on exact science. Despite modern economic techniques, judgment is required to interpret trends that still cannot always be exactly measured, or whose outcome will be shaped by time lags...

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