Cape Town – Reserve Bank Governor Lesetja Kganyago says that the electricity crisis and logistics challenges are still posing inflationary risks to the economy.
On Thursday, the South African Reserve Bank’s monetary policy committee maintained the repo rate at 8.25%, marking the fourth consecutive hold since May of the previous year.
This came after a series of ten consecutive rate increases.
Against this backdrop, the MPC decided to keep the repurchase rate at its current level of 8.25% per year. The decision was unanimous.
— SA Reserve Bank (@SAReserveBank) January 25, 2024
The current repo rate was the highest in 14 years.
The decision aligned with economists’ predictions, and Kganyago said that it was a unanimous decision by the committee.
“The MPC decided to keep the repurchase rate at its current level of 8.25% per year. At the current repurchase rate level, policy is restrictive, consistent with the inflation outlook and the need to address rising inflation expectations,” EWN quoted Kganyago as saying.
He emphasised the necessity of anchoring inflation expectations to the midpoint of the target rate for achieving permanently lower inflation and interest rates.
According to eNCA, Kganyago said: “The economic outlook is highly uncertain. 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.”
“Future committee decisions will data dependent and sensitive to the balance of risks to the outlook.”
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Compiled by Betha Madhomu
