The Monetary Policy Committee of the SA Reserve Bank missed a golden opportunity by not cutting the repo rate by at least another 25 basis points.
It is our contention that with the Consumer Price Index (CPI) currently at its lowest level since September 2015 (last month StatsSA announced an annual CPI of 4.6% in July 2017, down from 5.1% in June 2017), no demand inflation, a stable currency, low credit growth for individuals, unemployment and poverty at record levels, and an increase in personal income tax a further reduction in the repo rate would have been the correct decision.
A lower repo rate might have revived construction and other job-creating projects that have been unable to obtain financing due to high interest rates.
The only way forward is to have an interest rate reduction of at least 50 basis points which will hopefully incentivise consumers to spend more and investors to invest. The latter will, in turn, stimulate economic growth.
For further enquiries or to set up a personal interview,
please contact Andre Venter at 083 251 3274.