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Changes Coming To the SARB MPC

There are changes coming to the SA Reserve Bank’s Monetary Policy Committee (MPC) that are stirring discussions and debates and may impact on what you pay on your debts.

New Members for the MPC

The SARB MPC makes decisions about the Repo Rate and this influences how much everyone pays (or gains) on their credit.

When they decide rates must go up, then the banks all push their rates up and consumers pay more for existing debt and when they decide rates can come down it can provide much needed relief for those paying off big debts.

Vacancies in key positions, especially the Deputy Governor role, have everyone in a bit of a spin. Government agencies seem to be at odds over potential candidates, adding another layer of complexity to the decision about who gets the job. Basically, some agencies want their candidates on board to promote their views on financial (monetary) policy.

Among the main contenders for the post are Mampho Modise, head of the public finance division at the Treasury, and Unathi Kamlana, the commissioner of the Financial Sector Conduct Authority (FSCA).

‘Among the main contenders for the post are Mampho Modise, …and Unathi Kamlana’

The differing opinions on these candidates and who would be best for the job (and the views they hold) reflect broader disagreements about the overall future direction of SA’s monetary policy. 

And, talks of expanding the committee by adding another member (which would help when there are deadlocked votes) are underway, indicating significant shifts coming.

Will We See Rate Cuts?

While all that is going on most of us are eagerly anticipating potential interest Repo Rate adjustments in the near future (downwards of course).

Rates have been high for a while and we have seen inflation starting to ease over time. The MPC may feel that’s because of high rates but there is debate it may simply be because of the Rand to Dollar and oil prices.

Despite worries about challenges like loadshedding and transportation disruptions, there is a little hope for some rate cuts at some point this year and maybe a few bigger ones next year. However, uncertainties regarding inflation risks and the coming elections etc persist, which goes to highlight the tricky decisions that the SARB must make to navigate monetary policy effectively. Having the right person or persons on the team will make a big impact.

As the search for new committee members progresses, all eyes are on President Cyril Ramaphosa, who holds the ultimate authority to make these appointments. The truth is that the coming changes hold big implications for SA’s economic trajectory and how much we will all be paying on our debts.