SARB keeps repo rate unchanged at 8.25%, remains 'vigilant'

Thus keeps the prime lending rate, at which commercial banks lends money, at 11.75%.

Reserve Bank Governor Lesetja Kganyago made the announcement on Thursday.

The SARB decision comes after the US federal bank also decided to keep their repo rate unchanged on Wednesday.

The decision to keep the repo rate unchanged comes as a relief to indebted consumers. 

Kganyago said in the coming months they expect the headline inflation to rise somewhat, before reverting to the mid-point of the target range in 2025.

"The MPC decided to keep the repurchase rate at its current level of 8.25% per year. Three members of the committee preferred to keep rates on hold, and two preferred an increase of 25 basis points.

"At the current repurchase rate level, policy is restrictive, consistent with the inflation outlook and elevated inflation expectations. Serious upside risks to the inflation outlook remain."

He said the MPC will remain vigilant, as food price inflation remains high, oil markets have tightened significantly, and core inflation looks sticky.

"In light of these risks, the committee remains vigilant and stands ready to act should risks begin to materialise. Decisions will continue to be data dependent and sensitive to the balance of risks to the outlook.

"The inflation and repo rate projections from the updated QPM remain a broad policy guide, changing from meeting to meeting in response to new data and risks,” he added.

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