Only lower inflation rate would allow cut in interest rates, says Kganyago

Governor defends Reserve Bank independence and inflation-targeting, and says rate of 4.5% would see economy growAny analysts who are banking on the Reserve Bank to reverse its stance and cut interest rates anytime soon could be mistaken.

The committee will make its next decision on March 28, with analysts expecting an unchanged stance in response to the improved inflation outlook. Some analysts have pencilled in rate cuts towards the end of 2019. “At the end of the day, central bank independence allows the Reserve Bank to hear what different interest groups have to say, but gives it the policy space to make decisions about inflation that on balance benefit all,” he said.Earlier in 2019, the ANC, which voted in favour of nationalising the Bank at its 2017 elective conference, stated in its election manifesto that the central bank must consider the effect of monetary policy on economic growth when it decides on interest rates.

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