Today (Thursday 14 August), Reserve Bank governor, Tito Mboweni, announced that the Reserve Bank’s (SARB) Monetary Policy Committee (MPC) has decided to keep the repo rate at 12%. “The MPC has considered recent economic developments and the outlook for inflation and has concluded that, notwithstanding certain risks to future inflation outcomes, the current monetary policy stance is appropriate,” Mboweni said. This news comes as a huge relief to many who had feared that interest rates could go up again. But one should not be overly happy as the MPC will continue to monitor the situation and if need be, they will rise interest rates as they see fit.

For now the outlook is good, currently oil is trading at around $112 per barrel, compared to around $140 per barrel at the time of the previous MPC meeting. The price of oil plays a huge party in determining the rate of inflation. If world oil prices remain low and the rand does not soften, the fuel prices in South Africa are set to ease which will be added good news to consumers.

After all the bad news we had been used to in the South Africa economy, things are slowly starting to look up; today interest rates remained unchanged and hopefully a significant drop in fuel prices will occur next month. Good times surely lie ahead for now, but we should not get too carried away.

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