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Solidarity welcomed the Reserve Bank’s decision to leave the interest rate unchanged.
“I am pleasantly surprised by the Reserve Bank’s good judgement in this matter. They are usually overly conservative,” says Theuns du Buisson, economic researcher at the Solidarity Research Institute (SRI).
“This time, they have shown the necessary prudence to recognise that the current rise in inflation has little to do with monetary policy and therefore cannot be corrected through changes in monetary policy.”
According to him, the most recent CPI publication shows that most items in the CPI basket remain close to the Reserve Bank’s inflation target.
He added that the current upward trend in inflation is likely to subside once fuel prices decline again.
It is therefore encouraging for Solidarity and its members that the interest rate has not been increased.
Issued by Solidarity
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