As expected Reserve Bank Governor Tito Mboweni has announced that that the key repo rate will remain at 12%.This did not surprise anyone as most economists had predicted this outcome for the two day Monetary Policy Committee meeting held this week in Gauteng.Also the prime lending rate was announced to be 15.5%.
Some were speculating that there may have been an interest rate cut after central banks from around the world decreased theirs in an attempt to stimulate their economies.Australia was one of the many countries to do so.
We ,as South Africans, should perrhaps feel fortunate because according to Trevor Manuel and others such a move would be unnecessary because of the policies that are in place that protect South Africas economy.Many are saying we have a resilient economy that’s security was improved by the institution of the National Credit Act and FICA.
That said,Trevor Manuel has also said that South Africa will feel the effects of what is happening in the global financial sector.But it’s not all bad,Tito Mboweni also said that there was a possible improvement for inflation in the 3rd quarter and that it may peak at 13.3%.
Hopefully we will also see that 0.5% reduction of the repo rate in December,that would give many people something to smile about.
