Reserve Bank keeps repo rate unchanged at 6.75%
The Reserve Bank governor says there are numerous pressures on inflation, but it will still decline slowly for the next three years, as it has since 2017.
The South African Reserve Bank (SARB) has kept the repurchase (repo) rate unchanged at 6.75% on Thursday while retaining a cautious policy stance.
Reserve Bank Governor Lesetja Kganyago announced the policy decision at a news conference on Thursday afternoon.
Three members wanted it unchanged. Two wanted a 0.25% cut.
In its previous assessment this year, the SARB’s monetary policy committee (MPC) unanimously also decided to keep the repo rate at which it lends to commercial banks unchanged as it cut its economic growth forecast.
The MPC, however, warned of inflationary pressure in the months ahead stemming from increases in electricity tariffs, higher oil prices and the rand exchange rate.
Kganyago predicted economic growth of 1% over the coming period, with the risk to the growth forecast being on the downside. He said load shedding and further risks of it, high levels of public debt, household indebtedness, a strike at Sibanye’s gold mines, Brexit and numerous other threats had had a depressing effect on economic prospects.
He said South Africa’s economic problems were of more of a structural nature than a monetary police one.
He further announced that Christopher Loewald, the bank’s head of policy development and research, was joining the MPC for the next three years.
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