Karas comments were laughable

Iam no economist, but I found laughable the comments by the Old Mutual fund manager Arthur Karas to say just the other day that “with the rand relatively strong, inflation heading lower, we needed a boost by having the Sarb cut interest rates”, although it didn’t happen.

I disagree with his statements as the rand has taken another knock the last two weeks from below R13 to the dollar and it is already R 13.38 today and climbing.

As for inflation, it was announced just the other day that it went up by 0.2%.

Also, the two huge increases in the petrol price the last two months have not even worked their way through the system yet and so inflation will shoot up, not even counting another big petrol increase for October, and so my projection is only upward.

At the same time, the IMF announced that its new projection of our GDP growth for the year has been cut from an original 1.2% to a measly 0.6%.

He forgot to mention as well that it is not only economics responsible for the currency fluctuations but the rand remains sensitive to political developments, weak economic growth prospects and, of course, the “boogie man” of further sovereign downgrades that I think are coming in October after the mini-budget.

Jean Michel,

Bryanston

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