The SARB Catches a Breath on its Hiking Journey

SOUTH AFRICA - Report 27 Mar 2014 by Iraj Abedian
Following a 50-basis point increase in the benchmark interest rate in January 2014, the South African Reserve Bank (SARB)’s Monetary Policy Committee (MPC) decided to pause the interest rate hiking process. The repo rate will, for now, remain at 5.5% per year. Graph 1 Headline and Core Annual Inflation Rates and Repo Rate, South Africa Source: SARB, Stats SA and PAIRS Today’s MPC statement was somewhat out of the ordinary. One is struck by a sense of novelty in the MPC’s communication style. The era of “forward guidance” – whereby a central bank pre-announces its intended future decision on...

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