NO RELIEF FOR CONSUMERS
AMID heated calls from the left pushing for nationalisation of the Reserve Bank, governor Gill Marcus has kept the repurchase rate unchanged at 7percent.
"This will not relieve the pain among consumers heavily burdened by debt," says Investec economist Annabel Bishop.
Marcus said yesterday that the decision by the bank's Monetary Policy Committee (MPC) was not unanimous and that many members were seeking a rate cut. She added that no discussion on an increase in rates was held.
The decision to maintain the repo rate was not unexpected, with 23 of the 26 economists polled by Reuters earlier this week predicting this outcome.
Not all economists share this view. "We shouldn't dismiss the expectation of a rate cut (in the future)," said Brait economist Collen Garrow, "not until the bank declares that cycle is over".
In response to calls from the ANC and Cosatu for the bank to be nationalised, Marcus echoed a statement issued by the bank earlier this week.
Marcus said that seven members of the bank's board were appointed by government and the other seven were shareholders and the governor had the casting vote.
In a statement released earlier this week, the bank said it had "noted the media interest evidently generated by comments of ANC general secretary Gwede Mantashe and would like to clarify the current parameters within which the SARB operates".
"The main objective of the SARB, as set out in the SARB Act and the Constitution is to protect the value of the currency in the interest of balanced and sustainable economic growth in SA," the statement said. "This is achieved through the conduct of monetary policy."
It said that since monetary policy issues and the economy affected society as a whole, central banks worldwide were regarded as public entities that fulfilled public interest roles.
The SARB said control over it was exercised between its shareholders and government in a manner whereby the latter, in normal circumstances, might exercise ultimate control over the bank.
She maintained that the "core function of the central bank was to tackle inflation".
The MPC expects to see CPI inflation increase above the target range in the next three months at an estimated 6,5percent for December and January.
The December CPI figures will be released by Stats SA today.