Rates expected to remain on hold despite rand weakness
Most economists expect the Reserve Bank's monetary policy committee to consider SA’s poor growth forecast
Despite a period of pronounced emerging-market (EM) currency weakness that has seen the rand fall to its weakest levels in two years and raised inflationary fears, the Reserve Bank is expected to keep rates unchanged this week, bringing much relief to an under-pressure South African economy. Turkey's central bank sharply increased its benchmark lending rate this week to support its plunging lira, which has been at the centre of the EM crisis in recent weeks. Most economists expect the Reserve Bank's monetary policy committee (MPC) to consider SA's poor growth forecast, which has now been revised to under 1% for 2018 after a surprise GDP contraction in the second quarter. The Bank, led by governor Lesetja Kganyago, follows its inflation-targeting mandate over and above any economic growth considerations, but in recent times past the state of the economy has weighed on its decision. Even so, some economists expect some of the MPC members to vote for a 25-basis-point hike. The bank has...
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