SARB keeps repo rate unchanged at 3.5%

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The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) has kept the repo rate unchanged at 3,5%, while the lending rate also remains unchanged at 7%.

SARB governor Lesetja Kganyago addressed a virtual briefing on Thursday. He says the decision was unanimous, given a ‘balanced’ economic outlook and inflation forecast.

Kganyago says the steady rate of vaccination in many countries has lifted projections for global economic growth and boosted confidence, significantly.

He says a stronger exchange rate and sustained economic slack are expected to offset higher electricity and food price inflation, keeping the headline inflation forecast low.

Video | Interest rate announcement: 20 May 2021

The SARB has revised economic growth to 4.2% for 2021 from a previous forecast of 3.8%.

Kanyago says the stronger growth forecast for 2021 reflects better sectoral growth performances.

Video: Chief Economist at Alexander Forbes, Isaah Mhlang and Economist at PWC, Dr Christie Viljoen discuss the announcement made by the SARB