FINQUESTION OF THE WEEK
RÉJANE WOODROFFE economist at Metropolitan Asset Managers
THE QUESTION shouldn’t be whether the SA Reserve Bank needs to dampen consumer spending but whether it needs to curb inflation. Inflationary pressures continue to come from high food and fuel prices and not from consumer demand. SHIREEN DARMALINGAM economist at Standard Bank
IT WOULD prudent for the Bank to keep interest rates unchanged even as renewed price pressures start creeping in. No rate change is expected next week (12 April)”. ANABEL BISHOP economist at Investec
IN ORDER TO materially slow consumer spending, the Bank will need to hike interest rates again by a similar magnitude to last year's move. However, the likely detrimental effect that this could have on foreign portfolio investment due to growth concerns could cause substantial rand weakness.” DENNIS DYKES economist at Nedbank
STRONG CONSUMER spending has been a key reason for rising imports and therefore a widening current account deficit. This has led to bouts of rand weakness that in turn feed into inflation.
desirable.” The 2006 hikes were justified. But probably a pause is now