Lesetja says since the November MPC the Rand has appreciated by 1.4% against the US Dollar; by 1.5% against the Euro and by 0.5% against on a trade weighted basis,” he explained at a media briefing in Pretoria.
The Governor has highlighted that the Rand remains sensitive to domestic growth prospects, political developments and policy settings.
“The domestic growth outlook remains sluggish. Although GDP increased by 2.2% in the third quarter of 2018, private sector fixed investment remains weak and production in key sectors remains volatile.”
Kganyago has welcomed the recent improvement in the inflation outlook due to a stronger rand and a drop in the petrol price.
The bank expects inflation to remain within the target range averaging 5.3% in the medium term. However, Kganyago has warned that risks to the inflation outlook remains.
“The overall risks are assessed to be moderately on upside. The risks include administered prices, rising domestic food prices, changing investor sentiments and volatile oil prices.”
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