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Nicky Weimar, Nedbank group chief economist, informed delegates at the Agbiz Grain Symposium on Monday 20 September what to expect in terms of future interest rate increases. Interest rate cost is an important cost in the grain-handling and storage sector.

She explained that in terms of South Africa’s monetary policy the Reserve Bank keeps inflation within the inflation target which is between 3% and 6%. However, the Reserve Bank targets the midpoint of 4,5%. The repo rate is adjusted by the Reserve Bank following the meeting of the Monetary Policy Committee to reach that objective.

Nicky stated that the worst of the rising inflation is over. The inflation outlook is pretty modest and the Reserve Bank’s estimates indicate that inflation will be fairly subdued and contained at a 4,5 % midpoint. If the rand were to come under pressure it has not resulted in any inflationary pressure. The pass-through of a weaker rand to consumers has been broken and is a lot weaker than it used to be.

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Issued by Nedbank group chief economist Nicky Weimar