BOTTOM LINE
- The SARB delivered its third consecutive cut at its January MPC meeting. However, previous rate cuts were by unanimous vote. This time, the vote was split, with four members favouring the cut while two voted for a hold. The reduction in the Repo Rate takes the policy stance to a more neutral level, removing some restrictiveness.
- The split vote and shift to an even more cautious stance is a result of greater global economic uncertainty, with Governor Kganyago specifically mentioning the outlook for monetary policy in the US, and the possibility of a global trade war.
- Locally, the growth outlook was assessed as balanced, while inflation risks are to the upside. The medium-term inflation outlook is highly uncertain, contributing to the more cautious stance.