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 -
#SARB's Marcus: we certainly see this as an interest rate raising cycle
— Ellis Mnyandu (@Ellis_Mnyandu) March 27, 2014
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 -
#SARB's Marcus says "we are indicating that interest rates are going to rise in the future".
— Ellis Mnyandu (@Ellis_Mnyandu) March 27, 2014
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 -
SARB MPC voted 4 to 3 in favour of holding rates. Close, very, very close. Risk analysis borders on extreme
— Cees Bruggemans (@ceesbruggemans) March 27, 2014
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 -
#GillMarcus: Rand exchange rate key reason for total 75 cents a litre increase in the petrol price over February and March. #SARB
— Business Report (@busrep) March 27, 2014
15:35 - Rand is also vulnerable to domestic factors
15:34 - Main upside risk to forecast still comes from exchange rate.
15:33 -
A fuel levy increase is due in April #MPC
— CNBC Africa (@cnbcafrica) March 27, 2014
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 -
Overall, private sector employment declined, especially within the gold and electricity sectors #MPC
— CNBC Africa (@cnbcafrica) March 27, 2014
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 -
Rand exchange rate will continue to be highly sensitive #SARB
— Moneyweb News (@Moneyweb) March 27, 2014
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, 201415:11 - 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 -
Core inflation is expected to average 5.6% in 2014 - #Marcus #SARB
— BusinessDay TV (@BusinessDayTV) March 27, 2014
15:03 - Rand remains vulnerable to global shifts
15:01 - Marcus starts speaking...