‘Decision to leave interest rates unchanged in line with other banks’

Reserve Bank
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Economist Dr. Azar Jammine says the decision to leave interest rates unchanged by the Reserve Bank was in line with other central banks around the world.

He was reacting to the Monetary Policy Committee’s unanimous decision to keep the repo rate at 8.2%.

The decision means that the prime lending rate remains steady at 11.5%.

Jammine says, “The Reserve Bank is cautious in line with other central banks of the world and is feeling that inflation is a little more sticky in coming down than people had hoped some months ago.”

“On top of that, we’ve got the additional factor of possible increases in maize, and sunflower prices, as a result of severe drought conditions, which might keep inflation a little more elevated, through the coming year and a half, than previously anticipated. As a consequence, the Reserve Bank was unlikely to cut interest rates at this stage.”

Reserve Bank Governor, Lesetja Kganyago says, “The committee still sees headline inflation heading to 4.5%. However, given extra inflationary pressures headline now reached the target mid-point only at the end of 2025 which is later than expected. As a result, the policy stance in our baseline also starts to normalise later.”

VIDEO: MPC decision on interest rate:

Additional reporting by Nothando Magudulela.