APA-Pretoria (South Africa) The South African Reserve Bank’s (SARB) Monetary Policy Committee has decided to leave the repurchase rate (repo rate) unchanged at 8.25 percent, SARB governor governor Lesetja Kganyago has announced.
Making the announcement in Pretoria on Thursday, the governor said policy was restrictive at the current repurchase rate level, consistent with the inflation outlook and this was needed to address rising inflation expectations.
South Africa’s inflation rate stood at 5.1 percent in December, and “guiding the inflation rate to the mid-point” of about 3 percent to 6 percent was imperative, he said.
According to him, serious upside risks to the inflation trajectory from global and domestic sources were evident and … the economic outlook was highly uncertain.
Kganyago said the inflation and repo rate projections from the updated quarterly projection model remained a broad policy guide, changing from meeting to meeting in response to new data.
“Future committee decisions will be data dependent and sensitive to the balance of risks to the outlook,” he said.
He added: “Guiding inflation back towards the mid-point of the target band will improve the economic outlook and reduce borrowing costs.”
NM/jn/APA