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The DA welcomes today's interest rate announcement by the Monetary Policy Committee (MPC) of the Reserve Bank to reduce the rate by 50 basis points - this is particularly important as the decision weighs in all manner of long term economic interests such as financial stability and economic growth. The SARB outlook is therefore more optimistic than generally thought.
Without economic and financial stability, no amount of government spending or transfers to vulnerable groups will ever result in sustainable economic growth that benefits the entire country. A country without financial stability is like a house built on sand - any sudden deterioration in international investor sentiment can ruin the economy if there is no stable financial foundation. And high inflation erodes away the buying power of the poor and unskilled workforce first and foremost.
This is exactly why the Bank plays such a crucial role in guiding monetary policy - it needs to weigh up various interests in a dispassionate way in order to ensure that no industry, labour union or political party exerts undue influence on the final decision. This is no small achievement and the fact that South Africa has withstood most of the international liquidity fallout also bears testimony to the skills of the SARB.
The DA would also like to especially congratulate the Registrar of Banks on the excellent job done in ensuring that South Africa did not face the same kind of Bank failures as the rest of the world.
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