Repo rate left unchanged
The South African Reserve Bank’s Monetary Policy Committee left the repo rate unchanged at its first meeting of the year.
The repo rate, at which the central bank lends money to commercial banks, was left at 6.75%.
The prime lending rate remains at 10.25%.
Reserve Bank governor Lesetja Kganyago made the announcement in Pretoria on Thursday.
"The MPC has taken note of the improved inflation outlook, especially in the near term. Over the forecast period inflation is expected to remain within the inflation target range, averaging 5,3% in 2020 and 4,8 % in 2021,” Kganyago said.
Kganyago warned that while the inflation outlook remains positive, there are some possible threats lurking around the corner.
"The overall risk to the inflation outlook are assisted to be mostly on the upside.
"The risks includes administered prices such as electricity and water tariffs, rising domestic food prices, changing investor sentiments towards emerging markets, moderation in global growth and volatile international oil prices, " said Kganyago.
Efficiency Group economist Francois Stofberg says while the decision was not an easy one, he believes it to have been correct.
"This really gives the Reserve Bank the leniency or flexibility to pursue their secondary mandate, which is to support economic growth and of course to a extent create job creation in South Africa.
"So they have decided save the consumers who are debt burden of not paying any more of those outstanding debt of cars and houses, so good prudent decision that can support the economy in the short term, " says Stofberg.