SARB hosts Monetary Policy Review Forum

Limpopo’s inflation rate is slightly higher than the 4,2% of Gauteng due to the fact that high fuel prices and the distance from major suppliers of goods and services have a greater impact on the cost of living.
This was mentioned at the quarterly Monetary Policy Review Forum of the South African Reserve Bank (SARB) that was hosted at Sun Meropa on Tuesday evening.
The theme of the engagement was ‘Delivering on the mandate in a world of risks’ and it afforded members of the financial and business fraternities an opportunity to obtain insight into the institution’s sentiments and stances on the South African and global economy.
The SARB was represented by Deputy Governor Fundi Tshazibana, Senior Bank Analyst Kalai Naidoo and Associate Economist Koketso Mano.
Tshazibana opened the session and announced that the quarterly forums in every province will in future only be hosted once per year and be named ‘Talk to the SARB Forum’ with a more interactive nature.
Tshazibana gave an overview of the SARB’s policy stance and said that South Africa’s economy faces two large macroeconomic risks, the global risk is a slowdown in trade growth that could precipitate a global recession and the domestic risk is a deteriorating fiscal situation linked to bailouts for state owned enterprises. “Both could worsen an already difficult domestic growth situation,” Tshazibana reckoned.
According to Tshazibana, the economy’s potential growth rate has slumped to around 1% in the context of supply constraints and in particular electricity shortages and depressed business confidence. Demand has also weakened in the face of higher taxes and slowing wage growth, among other factors.
“Inflation outcomes have been better, being close to the midpoint of the 3 to 6% target range, which has given policy makers some space to reduce interest rates, Tshazibana added.
In conclusion, Tshazibana said that looking forward, the policy stance aims to provide support to a weak economy while ensuring that inflation remains within the target range, despite risks.

Story and photos: BARRY VILJOEN
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