* CPI forecasts up on cost-push pressures
* Bonds weaken, MPC did not discuss rate cut
* Bank cuts growth forecasts
* Consensus is that next rate move will be up
(Changes dateline, adds quotes, analysis)
By Phumza Macanda
JOHANNESBURG, Jan 19 (Reuters) – South Africa’s
Reserve Bank left its repo rate unchanged at 5.5 percent on
Thursday as expected, with concerns about a slowing economy
off-setting the pressures from inflation, which is likely to
stay outside its target band for longer than previously
expected.
At its first policy meeting of 2012, the bank raised its
inflation forecast, saying it expected inflation to be outside
its 3-6 percent target range throughout 2012, with the recent
depreciation of the rand the main reason.
Government bonds weakened after that, with investors worried
inflation would eat into their returns. Governor Gill Marcus
said the bank did not discuss reducing interest rates, a hint
that monetary loosening might off that table.
“It seemed as though there was a little bit more of a
hawkish undertone to the message. Obviously, the Reserve Bank is
a little bit uncomfortable with the inflation being above the
target zone,” said Dennis Dykes, chief economist at Nedbank.
Continued…
