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Interest rate announcement as it happened

Cape Town - The SA Reserve Bank's monetary policy committee (MPC) has been in talks over the past three days to discuss the repo rate.

In January the MPC announced a rate hike of 50 basis points that caught economists and consumers unawares.

All eyes are now on Sarb governor Gill Marcus. Will she announce another increase?

Twenty-three of 30 economists polled by Reuters expect no hike. But they got it wrong in January...


15:51 - Naidoo: Certain indicators like manufacturing export orders are at 10 year high – so shows certain sectors are beginning to benefit from weaker exchange rate.


15:51 - Kuban Naidoo: We expected that exports would increase due to weaker rand but that was not as much as anticipated.


15:50 - Marcus: We are trying to anticipate in a very uncertain environment. We are saying there will be interest rate increases in future.


15:50 - Marcus: We are saying it is not necessary for a rate increase at every MPC meeting, we are just saying it is an upward cycle.


15:49 - 


15:48 - Marcus: It is clearly a cycle of upward interest rates.


15:48 - Marcus: We are dealing with a very uncertain environment.


15:47 - Marcus: We might not automatically follow the same rate of increases in future.


15:44 - Marcus: Relatively subdued private sector credit extension.


15:43 - Marcus: The past is not the best predictor of the future.


15:43 - Marcus: Question not about what economy can handle – our approach is looking at data. We see it as an interest raising cycle. How long that will last will depend.


15:43 - Cassim: Previous rate increase was indicator of how seriously we take inflation.


15:42 - Rashad Cassim: Ultimately one critical determinant was inflation expectations.


15:42 - Now questions time


15:41 - 


15:40 - Marcus: We do not see reducing rates at this point in time.


15:39 - Employer/employee relationships also important factors when looking at future growth.


15:39 - Concerns on growth front – linked to what happens in markets – and about certainty about electricity supply and outlook in terms of new investments.


15:38 - 

15:38 - Marcus – decision was not unanimous – 4 felt hold and 3 felt raise.



15:38 - MPC will keep repo rate unchanged.



15:37 - Fine balance required.


15:37 - MPC will continue to focus on medium term inflation.



15:36 - Domestic economic outlook remains fragile.
15:35 -

15:35 - Rand is also vulnerable to domestic factors



15:34 - Main upside risk to forecast still comes from exchange rate.



15:33 - 

15:32 - Fuel levy increase in April.


15:31 - Wheat and maize prices reflect exchange rate and draught impacts.


15:31 - Further pressures evident in agriculture producer prices.


15:30 - Wage negotiations will be an important factor for inflation.


15:30 - Unit labour cost increase in Q4.


15:29 - Trend in wage settlements has remained relatively unchained – overall 7.9% in 2013.


15:29 - Mortgage lending remained weak amid moderate house price growth.



15:28 - Budget deficit of 4% of GDP estimated for 2014.



15:28 - Real retail trade sales exceeded market expectations in January, but the outlook for consumption spending is expected to be subdued.



15:27 - Household spending on durable goods remained firm.


15:26 - 



15:26 - Private sector employment has declined.


15:25 - Employment levels increased marginally in Q4 2013.


15:25 - Outlook for mining sector remains bleak.


15:25 - Manufacturing confidence remains low.


15:24 - Risks are on downside due to platinum strike.


15:23 - Banks forecast for economic growth has declined marginally.


15:20 - Net exports made positive contributions to GDP growth in last two quarters of 2013.


15:20 - We expect current account to respond to depreciated exchange rate.


15:19 - Risks are still on the upside and exchange rate will stay highly sensitive.



15:19 - 



15:18 -  Rand has been volatile since previous MPC meeting.

15:16 - Crimea contagion effect remained contained up to now.


15:15 - Marcus: Eurozone growth prospects remain weak.
15:14 - Marcus: Underlying US growth expectations remain relatively favourable.



15:13 - Marcus: Reuters survey shows inflation expectation unchanged – remain at upper end of ban.


15:12 -


The MPC believes the South African exchange rate will still continue to be sensitive to global and internal pressures #MPC

— CNBC Africa (@cnbcafrica) March 27, 2014

15:11 - Marcus: Inflation expectations remain unchanged – average 6.1% for 2014.


15:09 - Marcus: Lag effect of repo rate increase.

15:08 - Petrol price was other main contributor to higher CPI in February.


15:06 -  Core inflation outlook has improved.

15:05 -

15:03 - Rand remains vulnerable to global shifts

15:01 - Marcus starts speaking...


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