South African Reserve Bank (SARB) Governor Lesetja Kganyago has announced that the bank’s Monetary Policy Committee (MPC) has unanimously agreed to keep repurchase rate (repo rate) at 8.25%.
Kganyago announced this at a press briefing on Thursday afternoon.
“At the current repurchase rate level, policy is restrictive, consistent with the inflation outlook and the need to address rising inflation expectations. Serious upside risks to the inflation trajectory from global and domestic sources are evident and… the economic outlook is highly uncertain.
“The inflation and repo rate projections from the updated QPM [Quarterly Projection Model] remain a broad policy guide, changing from meeting to meeting in response to new data. Future committee decisions will be data dependent and sensitive to the balance of risks to the outlook,” he said.
Kganyago said that “guiding the inflation rate to the mid-point” of about 3 to 6% is imperative.
The current inflation rate stands at 5.1%.
“Guiding inflation back towards the mid-point of the target band will improve the economic outlook and reduce borrowing costs.
“Since early 2020, the committee has recommended additional means of strengthening economic conditions, including achieving a prudent public debt level, increasing the supply of energy, keeping administered price inflation low and real wage growth in line with productivity gains. Such steps would also strengthen monetary policy effectiveness and its transmission to the broader economy. – SAnews.gov.za