S.Africa rate cuts can’t be taken for granted:Marcus
DURBAN, July 28 |
DURBAN, July 28 (Reuters) – Further interest rate cuts in
South Africa will depend on growth and inflation in coming
months and should not be taken as a given, central bank Governor
Gill Marcus reiterated on Saturday.
The Reserve Bank unexpectedly reduced rates by 50 basis
points to 5.0 percent last week, citing concerns about the
effect of a global downturn on Africa’s largest economy.
The bank also cut its 2012 growth forecast to 2.7 percent
from 2.9 percent and said the risks to the outlook were
negative.
“We had previously thought that we were at the bottom of an
interest rate cycle but events unfolded in an unexpected way,”
Marcus said of the decision.
Economic analysts have speculated the cut could be the
start of another cycle of monetary easing after the bank slashed
rates by a cumulative 6.5 percentage points between 2008 and
2010 to spur growth after a recession.
“Further easing however cannot be taken for granted and will
be contingent on changing global conditions and well as further
inflation and growth developments,” Marcus told an editors’
forum, echoing comments she made at the Bank’s annual general
meeting on Friday.
“I should emphasize that it is also important for the
markets to pick up the signals from the changing fundamentals in
the economy. If the fundamentals or circumstances change all of
a sudden, this may lead to a change in policy.”
(Reporting by Xola Potelwa)
Category: Africa News
