Governor of the Reserve bank, Lesetja Kganyago, has announced that the repurchase rate will remain unchanged at  3.5%. Some economists had expected a rate cut.

Kganyago says the current low interest rate environment is adequate enough to support the economy. Kganyago says the bank has decided to maintain the current low rates on growth concerns.

“We still believe that the Monetary Policy Stance is very accommodative. When you look forward, you will realise that for all of this year and the next two years policy rate is below what we believe to be neutral rates. And we decided to keep it there because we are worried about the state of the economy.”

Last year, the bank cut the repo rates by a cumulative 300 basis point in the face of a hard lockdown to deal with the first wave of COVID-19.

Kganyago made the announcement during a virtual briefing in Pretoria on Thursday.

Two members of the committee preferred a 25 basis point cut and three preferred to hold rates at the current level.

The implied policy rate path of the quarterly projection model indicates two increases of 25 basis points in the second of the third quarter of 2021.

The steps taken by the bank have ensured adequate liquidity in domestic markets.

Reserve Bank announces interest rate decision: