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The Reserve Bank’s Monetary Policy Committee meets on rates from Tuesday, with a decision due out on Thursday afternoon. The Bank finds itself in a tough space with the need to balance the need for growth with lurking inflation concerns.
Inflation was higher than expected in March while retail sales growth for February slowed, suggesting the Bank will have to time any interest rate tightening carefully. The Reserve Bank ended its monetary loosening cycle in January, leaving the repo rate steady again at 5.5% in March after reducing it by 650 basis points between December 2008 and December 2010.
The consensus among economists is that the next adjustment in rates will be up, but the timing of the move is not yet clear. In March, the MPC statement was cautious, highlighting the ongoing recovery in the economy along with risks to the inflation outlook especially from food, oil and administered prices.
Also due out next week is manufacturing production data for March, as well as mining production. Adcorp’s Employment Index for April is out on Tuesday.
On the company front, there are quarterly reports from Sappi, AngloGold Ashanti and ArcelorMittal South Africa. Interim results are due from Oceana, Spar Group, Datatec, Nu-World and preliminary numbers from Value Group.
Overseas, consumer price inflation data for April is due in China, Germany and the European Union. The Bank of England’s inflation report is out, along with GDP data in the EU, US University of Michigan confidence and US advance retail sales (for April). – Hilton Tarrant (hilton@moneyweb.co.za)
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