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Repo rate remains unchanged at 3.5%, growth forecast revised higher

  • SARB Governor Lesetja Kganyago makes remarks at a closing news conference for the IMFC, during the IMF and World Bank's 2019 Annual Meetings of finance ministers and bank governors, in Washington, US, October 19, 2019.
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  • SABC-NEWS-Kganyago-R
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The South African Reserve Bank’s monetary policy committee has decided to keep the repo rate unchanged at 3.5% while the lending rate also remains unchanged at 7%.

Reserve Bank Governor Lesetja Kganyago says despite continued upside risks, the monetary policy committee expects the inflation rate to stay close to the midpoint of the inflation target.

Kganyago says the decision to keep rates unchanged was unanimous.

“Given the medium and long-term projections set out above, a weaker currency, higher domestic import tariffs and escalating wage demands present further long-term upside risks to the inflation forecast. Average expectations of future inflation remain unchanged at 4.2% for 2021 and 4.4% for 2022. ”

VIDEO: Reserve Bank announces interest rate decision:

The bank revised its growth forecast higher to 5.3% for this year.

“The MPC decided to keep rates unchanged at 3.5% per annum. The decision was unanimous. The implied policy rate path indicates an increase of 25 basis points 4th quarter of 2021. These levels reflect a highly accommodative stance.”

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