The Reserve Bank’s Monetary Policy Committee has again left the repo rate unchanged at its lowest level since it was introduced in 1998 – a unanimous decision by all of the committee’s five members.
Keeping interest rates low is the main tool the bank can use to support the economy and financially distressed consumers. However, the bank’s model suggests two hikes during 2021. “The big central banks are still in a money printing mode and have not started tapering [support for economies]. For as long as money is being printed in major economies, central banks in emerging markets have no reason to start increasing interest rates,” said Abedian.
This was the highest inflation level in 14 months or since February 2020, when it reached 4.6% ahead of the Covid-19 lockdown. Key economic data such as mining and manufacturing production, which both contribute more than 20% to South Africa’s economic output, rose slightly in the three months through March 2021, compared with the previous quarter.
So they can do anything with it