South African Reserve Bank governor Lesetja Kganyago announced that the central bank’s monetary policy committee (MPC) chose to keep the repo rate unchanged at 8.25% on Thursday afternoon.
The central bank governor told reporters in Pretoria that three members preferred to keep the rate on hold while another two members preferred an increase of 25 basis points.
Kganyago said the global economy saw enduring pressures on prices, adding that core inflation remained elevated, meaning consumer inflation will remain high.
“At the current repurchase rate level, policy is restrictive, consistent with still high inflation expectations and the outlook. Serious upside risks to the inflation outlook remain. In light of these risks, the committee remains vigilant and decisions will continue to be data-dependent and sensitive to the balance of risks to the outlook.
“The policy stance aims to anchor inflation expectations more firmly around the midpoint of the target band and to increase confidence of attaining the inflation target sustainably over time,” said Kganyago.
He said the current hiking cycle, which started in November 2021, has seen a cumulative 475 basis points increase, according to Standard Bank.
The central bank also revised GDP forecasts for South Africa upward to 1% in 2024 and 1.1% in 2025.
This comes after Stats SA announced that inflation dropped to 5.4% in June and that trade sales decreased 1.4% in May, with general dealers and retailers in hardware, paint and glass being the largest contributors to the decrease.
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