No changes to the interest rate, says SA Reserve Bank

The Monetary Policy Committee of the SA Reserve Bank has decided not to change the interest rate.

In line with what many economists predicted, the repo rate remains unchanged at 6.5%, and the prime lending rate is still 10%.

the repo rate unchanged at 6.5%, in line with the expectations of economists.

At its previous meeting in March the MPC decided to cut interest rates by 25 basis points. The repo rate is the benchmark interest rate at which the central bank lends money to commercial banks and the prime rate the rate at which commercial banks lend money to borrowers.

SARB governor Lesetja Kganyago said the decision to keep the repo rate unchanged was unanimous.

He added that the decision not to change the repo rate will help curb inflation. “The MPC still assesses the stance of monetary policy to be accommodative and appropriate given the forecast inflation trajectory and the current state of the economy. However, with risks and uncertainties at high levels, the MPC will maintain its vigilance to ensure that inflation remains well within the inflation target range, and will adjust the policy stance should the need arise,” he said.

The rand has strengthened marginally in the wake of the decision, moving from R12.42 to the dollar to R12.39 to the dollar.

Following the announcement, TreasuryONE  said that the South African Reserve Bank “remains concerned with inflation and feels the bottom of the cycle has been reached and the pressure will be on the upside”.