OPINION: SA Reserve Bank needs to show some tactical genius.

JOHANNESBURG - The time has arrived for the Monetary Policy Committee (MPC) of the South African Reserve Bank (Sarb) to show that it is a tactical genius.

The rest of the world has left the South African economy stranded. In normal times the acceleration of global economic growth would see our manufacturing sector accelerating, unemployment dropping, confidence increasing and budget shortfalls ease. The political impasse with its ramifications is causing the opposite and is putting Sarb and the country’s citizens under severe strain.

The popular narrative in South Africa is that business and consumer confidence must be restored to get the economy back on a growth trajectory. The weak confidence levels should be seen in context, though as the restrictive monetary policy pursued by the Sarb is partly to blame.

The hike in the repo rate - the rate at which the bank lends short-term money to banks - in July 2014 to 5.75percent from 5.5percent, while the inflation rate remained relatively in check dealt consumers a heavy blow as the lending rates adjusted for inflation hit their pockets.

Full story at IOL.

By Ryk De Klerk.