December's rate meeting canned

Johannesburg - The South African Reserve Bank's Monetary Policy Committee (MPC) has decided to revert to the pattern of only meeting every alternate month, governor Gill Marcus said in a statement on Tuesday.

"Should the need arise, this frequency will be reconsidered," the MPC statement read. The MPC's scheduled meeting for December 16 and 17 has been cancelled, with the next date being January 25 and 26.

Against the background of heightened volatility and uncertainty in international financial markets and the severe downturn in the global economy, the MPC decided earlier in 2009 it would be appropriate to meet more frequently to assess changing circumstances so that it could act appropriately when necessary.

"Although risks still remain, the global environment appears to have stabilised somewhat. The MPC has therefore decided to revert to the previous pattern of meeting every alternate month. Should the need arise, this frequency will be reconsidered," it said.

Rates unchanged

The MPC also announced on Tuesday to keep the repo rate unchanged at 7% - in line with consensus expectations.

"They kept interest rates unchanged as expected," said Doret Els, economist at Quantum Asset Management. "She [Marcus] had a professional demeanour. I like the fact that what was discussed at the MPC meeting was discussed at the [public announcement]. She reaffirmed that inflation targeting is the main tool used by the Reserve Bank."

The tone of the statement was always going to be important and in her first public appearance as governor, Marcus adopted a market-friendly stance, indicating she was not bound by any political value and that the bank would not be targeting a particular rand level.

- I-Net Bridge