Reserve Bank keeps repo rate unchanged at 6.5%
The prime lending rate remains at 10%.
South African Reserve Bank Governor Lesetja Kganyago. Picture: Thobile Mathonsi / African News Agency (ANA)
The South African Reserve Bank’s (SARB) monetary policy committee (MPC) on Thursday kept the repurchase rate (repo rate) unchanged at 6.5 percent.
Most economists had expected the rate to remain steady, which means the prime lending rate will be unchanged at 10%.
Making the announcement in Pretoria, Reserve Bank Governor Lesetja Kganyago said recent monthly inflation had been lower than the mid-point of 4.5%. Inflation year-on-year in October was 3.7%.
He said food price inflation continued to surprise on the downside. He added that headline inflation was expected to peak at 5.3% in the first quarter of 2020.
Kganyago acknowledged that growth in exports remained low. Investors remained concerned about the country’s growth prospects.
He said there was a risk of renewed market volatility internationally. The overall risk to inflation was balanced but uncertainty was high.
The central bank last raised the repo rate by 25 basis points in November to stem inflation pressures.
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