Business 19.5.2016 03:34 pm

Repo rate unchanged

Reserve Bank governor Lesetja Kganyago. Picture: GCIS/SAPA

Reserve Bank governor Lesetja Kganyago. Picture: GCIS/SAPA

The decision will offer relief to beleaguered consumers, but another rate hike is still likely later this year.

The SA Reserve Bank acted in accordance with the expectations of most economists this afternoon when it decided to leave the repo rate (at which the central bank ends money to commercial banks in the event of any shortfall of funds) unchanged at 7%.

Any increase would have put further pressure on South Africa’s already heavily indebted households. However, it is likely that rates will increase later in the year. The rand has been under pressure this week, along with higher oil prices, so inflation levels will continue to be a major concern.

 

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