Reserve Bank keeps repo rate unchanged
The South African Reserve Bank has kept the repo unchanged at 6.75%.
This means the prime lending rate remains at 10.25%.
The central bank’s governor Lesetja Kganyago made the announcement in Pretoria on Thursday.
"Key upside risks are rising administered prices, including electricity and water tariffs, rising domestic food prices in the outer years and higher international oil prices.
"Downside risks include lower global inflation and an extended period of monetary accommodation in advanced economies," said Kganyago.
Efficient Group Economist Francois Stofberg believes it was the right decision to keep the repo rate unchanged.
"The Reserve Bank quite adequately and smartly decided to keep the repo rate an unchanged at its current levels, it's a good decision.
"If they increase interest rates then we see individuals spending a little less because all the debt becomes more expensive. In that way they reduce spending and reduce inflation.
"So the consumer has more money than he would've than if they increased rates.”