South Africans this week gave their attention to the South Africa Reserve Banks Sarb Monetary Policy Committee MPC decision concerning the repo rate and President Cyril Ramaphosas Opening of Parliament Address OPA.
Thursday saw the 7 th meeting of the MPC keeping the repo rate at 8.25, however, two members wanted a cut.
Repo rate announcement in line with expectationsWaldo Krugell, Professor in Economics at the University North-West says the MPC stuck to their guns. The governor, Lesetja Kganyago, was emphasising throughout the announcement that the committee wants to see inflation within the target range. Despite inflation measures moving down, the MPC believed it was not time to cut yet. I think that is great to make policy, but consumers are struggling and I am really hoping for some relief in September.
Tshidiso Mofokeng, trainee Economist at the Bureau for Economic Research BER says with an improved inflation profile, and inflation expectations drifting lower, he is of a view that Sarb could have the scope to start a shallow-cutting cycle later in September.
Trade sales performanceThe annual retail sales registered a 0.8 rise in May, which is higher than the 0.7 increase registered in April. Mofokeng says general dealers contributed the most to the overall increase. Retailers in textiles, clothing, footwear and leather products did not do well. However, Mokeng suggests retail will still add positively to Quarter 2 GDP, barring an unlikely steep cut in June.
