Interest rate drop will be just reward

The news that the country's inflation rate has fallen to its lowest level since Covid is reason for cautious celebration - or is it?

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Inflation's taming is due to a number of factors - but an important one is the monetary policy applied by the SA Reserve Bank (Sarb). This operates on the principle that inflation is caused by increased demand.

And when an economy overheats because of this demand, then the medicine normally applied is to raise interest rates.