"The bank would maintain its focus price stability within a flexible inflation-targeting framework, Marcus reiterated in an introduction to its 2012/13 annual report. “The economy is facing a difficult time as it is buffeted by both global and domestic challenges. The bank will play its part in trying to navigate the economy through these turbulent times,” she said. A weaker rand and wage pressures have emerged as the main upside risks to inflation, Marcus said in the report, a largely backward-looking document that looks at the bank’s activities during the financial year ended March 2013. The Reserve Bank has kept the benchmark repo rate on hold at four-decade lows of 5,0% since a 50 basis point cut in July last year aimed at boosting sluggish growth. Bubbling inflationary pressures stemming from a sharp decline in the rand have prevented it from loosening policy any further. The currency has fallen 18% against the dollar since the start of this year, weighed down by investor concerns about a wide current account deficit and the impact on the economy of often violent mining strikes. More recently, the prospect of the US Federal Reserve winding up its bond-buying stimulus programme in the world’s biggest economy has also weighed on the South African currency."
Posted on: Fri, 28 Jun 2013 10:29:10 +0000
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