More rate cuts unlikely - Marcus

The Sarb caught most economists by surprise last month when it cut the key repo rate by 50 basis points to 6.5%.

Speaking at a conference in Sandton hosted by the Bureau for Economic Research (BER), Marcus said: "The scope for further easing is limited." However, she quickly added that this view was dependent on future risks that may change that outlook.

Marcus pointed to more money being moved into emerging markets, which had affected their exchange rates. "The fortunes of the rand followed that trend," she said, adding that the rand was the most volatile currency in the world.

Marcus stressed however, that curbing the rand's strength was not a factor in the most recent rate cut.

"We do not target exchange rates," she said. "We all want to see the rand at stable levels," Marcus said, adding that there was no straightforward solution.

The governor said that her primary target was the containment of inflation. "Our objective is to minimise shocks to the system... particularly where the growth rate is below its potential," she said.

"At this stage, inflation is within the targeted range," Marcus said.

Overall, the governor said: "We face a very challenging environment all-round, domestically and internationally. We seem to have weathered the storm."

She did add however, that the country should not be blind to risks that persist. "The domestic economy remains fragile," Marcus said.

- I-Net Bridge