They rightly wanted the repo rate to go up by 15-20 basis points because
- year-on-year inflation is already higher than it should be and soon hovering between 5% and 6%
- inflation hits the poor harder
- the latest household budget survey shows that economic growth of the last five years has not been inclusive
No one in her right mind can disagree with these facts. A few comments on them:
- one former Governor likened inflation to radioactivity
- South Africa has calculated that the inflation that hits the poor is 3% higher
- as expected the flat tax disease has operated like a reverse Robin Hood
Furthermore even the JEC -- not exactly the source of the most progressive economic statements since dinosaurs were wiped out from the face of the earth -- asked that the repo be left unchanged.
How can you then explain that the Financial Secretary asked for 50 basis-point cut? And that the MPC ended up lowering the key rate by 25 basis points?
Simple: there are way too many people on the MPC and at the Ministry of Finance who don't seem to understand the scope of an MPC. That's unacceptable. Because I am sure that the cost of running the MPC is nothing to be sneezed at. We should be able to count on Mr. Alan Ganoo to find that out for us. And to apply parliamentary pressure so that the MPC works for most of us.
Bravo for the record-breaking length of this post!
ReplyDeleteIn any case, Xavier's son is apparently following in his father's footsteps - hope his mind doesn't get polluted by his cousin...
Lol!
ReplyDeleteThat's definitely one of the longest post I've ever written in here. I must say I was not feeling too good about it's length and was even thinking of having it on another blog called Kozelidir+.
The body of the post is 348 words long. I should be able to chop off quite a number of words... when I get some time.
Oh, really? Who is the cousin?
This one appeared more convincing:
ReplyDelete"an increase in the Key Repo Rate would be suicidal."
Fear, shock, and what not.
So, now we see that the remedy for someone who has taken too much debt is to lower interest rates further more to allow it to take even more debt. What next - zero-interest rate? When inflation is already above the savings rate, what else are they going to cook up for us, mere mortals?
About the cousin: remember someone said that he was ashamed of the name his dad gave him, and then ended up taking the name of the dad's party? Now look at what Xavier's nephew was saying the other day...
ReplyDeleteHis views about the MPC and his perception the 'excessive strength' of the mauritian rupeee are also tasty...
There is a lot of nonsense and irony in what he presented. Hear it from the horse's mouth.
ReplyDeleteHow fast can we get a new FS who... gets it?
Kuzin sa, pa neve.
ReplyDeleteBtw, did you notice that the length of the post has been reduced by about 30%? To better fit with the spirit of concise writing on Kozelidir.
ReplyDelete