Reserve Bank keeps repo rate unchanged at 3.5%

As most market commentators and economists anticipated, the Monetary Policy Committee (MPC) of the South African Reserve Bank (Sarb) determined to maintain the repo rate unchanged at 3.5% on Thursday.

This follows the most recent meeting of the MPC. Consequently, the prime business lending rate stays at a five-decade low of seven%.


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Sarb governor Lesetja Kganyago mentioned it was a unanimous resolution by the MPC.

It is the sixth consecutive time that the MPC has opted to maintain the repo rate on maintain, after slashing charges by 300 foundation factors in complete final year within the wake of the Covid-19 outbreak and monetary fallout.

Kganyago mentioned current unrest and financial injury might have lasting results on investor confidence and job creation. “The direct and indirect costs of these events will likely further slow South Africa’s economic recovery. We estimate the unrest to have fully negated the 2021Q1 growth outcome.”


The SARB’s forecast for international progress in 2021 now sits at 6.1%. For 2022, we anticipate international progress of 4.4% and three.4% in 2023. Recoveries in rising market and growing economies are anticipated to lag these in superior economies, largely because of a slower tempo of vaccinations.

GDP in 2021Q1 grew by 4.6%, a lot stronger than the two.7% anticipated at the time of our May meeting. That end result mirrored higher sectoral progress performances and sturdy phrases of commerce in 2021H1. Commodity costs have remained excessive, sustaining revenue beneficial properties regardless of larger oil costs.

The GDP progress estimate for 2021 stays unchanged at 4.2%, whereas progress in 2022 is revised barely decrease at 2.3% (from 2.4%) and unchanged at 2.4% in 2023. The dangers to the medium-term home progress outlook are assessed to be balanced.




Headline CPI forecast has been revised larger for 2021 to 4.3% (from 4.2%), decrease to 4.2% in 2022 (From: 4.4%) and unchanged at 4.5% in 2023. The core inflation forecast for 2021 is barely decrease at 2.9% (from 3.0%), 3.7% in 2022 (from 4.0%) and unchanged in 2023 at 4.3%.

The dangers to the inflation outlook look like on the upside, regardless of weaker than anticipated companies inflation outcomes in current months. Risks emanate from fast international producer value inflation, meals value inflation, petrol, electrical energy, and different administered costs.

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