FINQUES­TION OF THE WEEK

Finweek English Edition - - Openers -

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

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