Reserve Banl
The Reserve Bank has left the repo rate unchanged at 8.25% following this week's meeting of its Monetary Policy Committee.
Govenor, Lesetja Kganyago, made the announcement on Thursday, a move largely expected in a week of national elections.
The prime lending rate remains unchanged at 11.75%.
Moneyweb says the benchmark repo rate has been at 8.25% for the last year, with inflation still at the upper end of the bank’s inflation target, albeit cooling from the spiralling levels of 2022 and 2023.
"For April, inflation slowed to 5.2%," it said.
Kganyaga said inflation outcomes were worse than expected early in the year, leading to a repricing of rate expectations, adding that there's still considerable uncertainty about the longer-run inflation outlook globally.
He said inflation outcomes in the United States have been more benign recently with markets still seeing room for adjustments by the US Federal Reserve this year.
"We may also see easing by other major central banks," Kganyago said.
The South African Reserve Bank MPC decided to keep the repurchase rate at its current level of 8.25% per year. The decision was unanimous. #SARBMPCMAY2024 pic.twitter.com/Zscn4uxpxn
— SA Reserve Bank (@SAReserveBank) May 30, 2024
Commenting on the news, the Pam Golding Property Group said the decision was "widely forecast and generally agreed by economists and market commentators.
Chief executive, Dr Andrew Golding, said much will now depend on future data releases, and whether they provide sufficient evidence of continued progress toward the inflation target to embark on a downward repo rate cycle.
"However, it has become apparent that neither the Fed nor the SARB are in any hurry to cut interest rates until such compelling evidence is available.
"While expectations of rate cuts have been repeatedly downgraded and delayed, it is still anticipated that there will be some minor relief before the 2024 year-end. However, the likely timing will depend on the monitoring of future data releases for confirmation that inflation expectations are anchored around the target," Golding said.
