Reserve Bank MPC decision

The Monetary Policy Committee decided to reduce the repo rate by 50 basis points to 6,5 per per cent per year, see the latest Statement of the Monetary Policy Committee available from the Reserve Bank. 
Next meeting on 12 & 13 May 2010.

... The year-on-year inflation rate as measured by the consumer price index (CPI) for all urban areas returned to within the inflation target range sooner than expected, in February 2010, when it measured 5,7 per cent. The moderation in inflation was fairly broad-based. The main contributors to the inflation outcome were the categories of housing and utilities and miscellaneous goods and services. The former category was driven mainly by electricity price increases of 26,8 per cent, while the latter category was driven by insurance costs relating to housing, health and transport. Food price inflation declined to 1,0 per cent, while communication costs declined by 22,0 per cent. Administered prices excluding petrol and paraffin increased by 10,8 per cent. Producer price inflation increased to 3,5 per cent in February 2010, compared with 2,7 per cent in the previous month. Food price inflation at the producer level remained well contained. Agricultural food prices declined at a year-on-year rate of 13,5 per cent, while manufactured food prices declined by 1,2 per cent. ...


Monetary policy stance: The assessment of the Monetary Policy Committee is that despite clear signs that the economy has emerged from the recession, the pace of recovery is expected to remain slow. The improved inflation environment has provided some space for an additional monetary stimulus to reinforce the sustainability of the upswing without jeopardising the achievement of the inflation target. The MPC has therefore decided to reduce the repurchase rate (repo rate) by 50 basis points to 6,5 per cent per annum with effect from 26 March 2010. The MPC will continue to assess developments, and will adjust the monetary policy stance when necessary in order to achieve the inflation target. ... more