The South African Reserve Bank’s Monetary Policy Committee (MPC) has decided to keep the repo rate at 8.25%, with the prime lending rate currently at 11.75%.
The decision was announced by Reserve Bank Governor Lesetja Kganyago following the July MPC meeting in Pretoria.
Kganyago said four members preferred an unchanged stance, and two preferred a reduction of 25 basis points.
“In discussing the stance, MPC members agreed that restrictive policy remains appropriate to stabilise inflation at 4.5%.
The committee assessed that an unchanged stance remained appropriate, given the inflation risks.
Some members, however, were of the view that the inflation outlook had improved enough to reduce the degree of restrictiveness,” said Kganyago.
The Governor expressed concerns about the country’s economic performance in the first half of the year, describing it as disappointing.
“The economy contracted slightly in the first quarter, by 0.1%, and recent data, including last week’s mining and manufacturing numbers, have caused us to trim our second quarter growth estimate modestly, to 0.6%.
Over the medium term, we expect somewhat faster growth, supported by a more reliable electricity supply and improving logistics, among other factors,” explained Kganyago.
