Reserve Bank positive about economic growth

The country’s economy may pick up speed earlier than expected and inflation in Limpopo (at 3,6%) is lower than the 4% that was predicted earlier and much better than the 8,3% that was recorded during the 2016/17 term.
This was announced by Kuben Naidoo, South African Reserve Bank (SARB) Deputy Governor during the SARB’s six-monthly Monetary Policy Review session that was hosted at a venue in the city last Wednesday evening. Naidoo was accompanied by SARB Senior Economists Nkhetheni Nesengani and Franz Ruch and guests from the financial and business sector attended.
Naidoo said that indications are that the economy would by 2020 have grown even better than the 2% that was anticipated by the SARB in March this year. “The last time that the country’s economy grew with more than 2% was during 2013, Naidoo added.
Naidoo explained that the primary mandate of the SARB is to achieve and maintain price stability in the interest of balanced and sustainable economic growth. The bank’s complementary mandate is to maintain financial stability. “Price stability helps to protect the purchasing power and living standards of all South Africans. It provides a favourable environment for investment and job creation and helps to maintain and improve international competitiveness. The SARB’s Monetary Policy Committee aims to keep inflation within a target range of between 3% and 6%,” Naidoo explained.
Naidoo stated that forecasts promise a benign combination of lower inflation and higher growth relative to the last few years. “This is a welcome improvement and may preface further gains,” Naidoo said.
In reply to a question from the floor, Naidoo said that VBS Mutual Bank is still managed by the appointed curator, Sizwe Ntsaluba Gobodo and that draw limits of R1 000 per day were imposed on clients to maintain the bank’s liquidity. “The SARB will, however, guarantee deposits of R50 000 per client,” Naidoo said. Naidoo also revealed that a preliminary report from the curator indicates that VBS Mutual Bank was subjected to bad management and that financial information provided by the bank were manipulated and that fraudulent reporting occurred.
“We urge clients to remain patient,” Naidoo concluded.

Story and photos: BARRY VILJOEN
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