South Africa surprised last week with it’s interest rate cut, bringing it’s prime rate down to 10%.
Inflation is at 5,7%, which is just a tad under the maximal treshold of the SA Reserve Bank; stressing the boldness of the move, especially if one knows to which extent Eskom electricity rates will go up in April (and continue to raise it’s prices beyond April). But the newly appointed South African Bank Governor Gill Marcus had to put a populistic stamp to please president Zuma, who is increasingly turning to the left.
In Brazil meanwhile Reserve Bank President Henrique Meirelles announced he will stay in post, despite the October elections ahead; only this announcement made the real increase further in value. Meirelles also announced that the focus of the reserve Bank will remain on inflation control; somewhat in contrast to South Africa. Inflation is at 5,17% and the SELIC intrest rate is currently at 8,75%.
Against the dollar the Real looks to end 2010 at a stable rate compared to end 2009; against the Euro though…
Tags: brazilian real 2011
