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Slight dip in inflation not enough for repo rate cuts this year?
Repo rate remains unchanged at 6.5%
The prime lending rate therefore remains at 10%, which was widely expected.
South African Reserve Bank Governor Lesetja Kganyago. Picture: Thobile Mathonsi / African News Agency (ANA)
SA Reserve Bank (Sarb) governor Lesetja Kganyago announced at the bank on Thursday that they had decided to leave the repurchase (repo) rate unchanged, at 6.5% per annum, with effect from Friday.
South Africa’s central bank last raised the repo rate by 25 basis points in November to stem inflation pressures. In May, the central bank’s monetary policy committee (MPC) unanimously decided to keep the repo rate unchanged at 6.75% per year while economic growth forecast was revised down.
Kganyago said in July that the MPC unanimously then decided to reduce the repurchase rate by 25 basis points to 6.5% per annum.
The MPC unanimously decided to keep the repurchase rate unchanged at 6.5% per annum. pic.twitter.com/jIQw387OhD
— SA Reserve Bank (@SAReserveBank) September 19, 2019
GDP rebounded to 3.1% in the second quarter – @KganyagoLesetja pic.twitter.com/R9QRKiUTBI
— SA Reserve Bank (@SAReserveBank) September 19, 2019
Citizen partner site Moneyweb was at the announcement at the bank in Pretoria and reported on it live.
Since July's MPC, there's been weaker global economic conditions and inflation : Lesetja Kganyago #Sarb #MPC
— Moneyweb News (@Moneyweb) September 19, 2019
In Q2 GDP rebounded but economic activity levels still remain weak: Kganyago #Sarb #MPC
— Moneyweb News (@Moneyweb) September 19, 2019
Y/Y inflation rate measured by CPI was 4.4% in August. Food price inflation rose to 3.9%: Kganyago #Sarb #MPC
— Moneyweb News (@Moneyweb) September 19, 2019
Med-term inflation outlook largely unchanged: headline inflation expected to average 4.2% in 2019; 5.1% 2020; 4.7% 2021 #Sarb #MPC
— Moneyweb News (@Moneyweb) September 19, 2019
Electricity, food & fuel price inflation continue to shape the near & medium-term trajectory of headline inflation. Fuel price inflation is expected to average 2.4% in 2019 & to peak at 11.8% in Q1 of 2020. While food price inflation is expected to peak at about 6% in Q3 of 2020. pic.twitter.com/2FMnlBCy4W
— SA Reserve Bank (@SAReserveBank) September 19, 2019
Electricity prices came out higher than expected in August, at 11.8%, but remain in line with the forecast.
— SA Reserve Bank (@SAReserveBank) September 19, 2019
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