Repo rate likely to remain unchanged, predicts economist
Chief Economist at Econometrix Azar Jammine says the South African Reserve Bank's Monetary Policy Committee is likely to keep the repo rate unchanged.
The governor of the South African Reserve Bank, Lesetja Kganyago, is set to announce changes to the repo rate on Thursday afternoon as the central bank continues with efforts to tame the country's high inflation rate.
The MPC met on Wednesday to deliberate on domestic and international financial data with the repo rate announcement expected in the afternoon.
The repo rate announcement comes just a day after Statistics South Africa announced the latest headline consumer inflation which increased for the third consecutive month from 5.4% in September to 5.9% in October.
The 5.9% increase is closer to the upper limit of the South African Reserve Bank’s inflation target range.
To protect the value of the rand, the SARB uses inflation targeting, which aims to maintain consumer price inflation between 3% and 6%.
Jammine says this might encourage the MPC to keep the repo rate unchanged at 8.25%
"I think that the Reserve Bank will be aware that the inflation rate will come back down again next month, next year and the following month thereafter and that will therefore leave the repo rate unchanged but with the warning that inflation re-pressures are still very prevalent and therefore people must not expect to see interest rate relief in a hurry."
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