MPC to meet more regularly this year

Wednesday, March 18, 2009

Pretoria - The Reserve Bank's Monetary Policy Committee (MPC) has decided to hold their regular meetings more often to allow for more effective planning and quicker reactions to changes in the economy.

The Reserve Bank this morning announced that the MPC will be meeting in March, April, May, June, August, September, October, November and December, excluding July, as opposed to the usual bi-monthly meetings.

This is according to Karen Chow a market analyst at Econometrix Treasury Management.

"This is not to say that they will be cutting rates at every meeting. It is so that they can plan more effectively and respond quicker to economic changes domestically and internationally," she said.

Ms Chow said she was expecting a 100 basis point cut at the next MPC announcement on 24 March, and a further 100 basis point cut on 30 April 2009.

Meanwhile, the retail sales data for January 2009 came in at 1.7 percent higher than the corresponding 2008 figure.

Ms Chow highlighted that the slight rise in January's figure over the 2008 figure was due to lower interest rates which has led to a moderation in the debt burden on South Africans families.

Also, she said, lower fuel prices coupled with aggressive rate cuts by the MPC have given families greater spending power.

The month-on-month retail sales figure between December 2008 and January 2009 fell by about 30 percent, but Ms Chow said, this was due to seasonal spending changes after the festive season.

Statistics South Africa said retail trade sales, at current prices, for the three months ending January 2009, increased by 11.7 percent compared with the three months ending January 2008.

The major contributors to this increase were general dealers, textiles, clothing, footwear and leather goods and retailers of food, beverages and tobacco in specialised stores.

Retailers in household furniture, appliances and equipment contributed negatively to the change in retail trade sales.