SA Reserve Bank leaves repo rate unchanged at 3.5%

JOHANNESBRUG – The South African Reserve Bank (Sarb) has decided to leave the repurchase rate (repo rate) unchanged at 3.5 percent as inflation is expected to remain contained in the medium term.

This move is expected to restore consumer confidence ahead of the festive season buying after household income was severely affected by a lack of economic activity during the hard Covid-19 lockdown.

In its final rates decision for the year, Sarb’s Monetary Policy Committee (MPC) decided to hold interest rates in a split decision as ewo members preferred a 25 basis point cut and three preferred to hold rates at the current level.

Sarb Governor Lesetja Kganyago today said that “risks to the inflation outlook are on the downside in the near term and balanced over the medium term’’.

Kganyago said that global producer price inflation and oil prices remain low, while local food price inflation was expected to remain contained.