Central Bank holds repo rate steady at 3.5%
The South African Reserve Bank’s Monetary Policy Committee (MPC) has kept the repo rate on hold following its meeting on Thursday.
This is a seventh consecutive time the central bank has opted to keep the repo rate unchanged.
The repo rate stands at 3,5% while the prime lending rate is expected to remain at 7%.
The central bank’s governor Lesetja Kganyago says the decision was unanimous.
"These repurchase rate levels reflect a highly accommodative policy stance through the end of the forecast, keeping financial conditions supportive of credit demand as the economy continues to recover.
"The bank has ensured adequate liquidity in domestic markets and will continue to closely monitor funding markets for stress. In addition, regulatory relief provided to banks continues to support lending to households and firms."
Global growth is forecast at 6.2% in 2021.
For 2022 global growth is expected to come in at 4.4% and 3.4% in 2023.
According to Kganyago, recoveries in emerging markets and developing economies are expected to lag in large part due to a slower pace of vaccinations.
Despite an improved outlook, Kganyago said economic and financial conditions are expected to remain volatile for the foreseeable future.
"The MPC will seek to look through temporary price shocks and focus on second round effects. As usual, the repo rate projection from the QPM remains a broad policy guide, changing from meeting to meeting in response to new data and risks," Kanyago added.
The central bank expects rates to increase by 25 basis points in the fourth quarter of 2021 and in each quarter of 2022.
Read full statement below:
Central Bank holds repo rate steady at 3.5% by Jacaranda FM News on Scribd