SARB leaves repo rate unchanged, revises growth downwards
The South African Reserve Bank’s Monetary Policy Committee kept the repo rate unchanged at 6.75% on Thursday.
The central bank increased the repo rate by 25 basis points to 6.75% in November but then left it unchanged in March.
With the repo rate unchanged, the prime lending rate will remain unaltered at 10.25%.
However, the central bank revised its growth forecast downwards and is now expected to expand by 1% in 2019.
Reserve Bank Governor Lesetja Kganyago expressed concern over the increase in food prices.
FNB chief economist Mamello Matikinca- Ngwenya says the downward revision can be largely attributed to load-shedding and the strike at the Sibanye-Stillwater mine in the West Rand.
“So I think as one reviews the high frequency data that has been released in first quarter, it is quite clear that there is an under performance in the economy and this is on the number of factors including the load-shedding that we saw at Stage 4 for 10 days, and the prolonged strike in one of the big mining houses in South Africa.
“Thus, the revision in the SARB's forecast reflect an expected contraction in GDP growth in the first quarter.’’