No change in repo rate

The South African Reserve Bank (Sarb) decided to keep the repo rate steady at 3.5% on Thursday, following the conclusion of its final Monetary Policy Committee (MPC) meeting for 2020 – a year that saw it slash rates by 300 basis points in total in the face of the Covid-19 economic crisis.

This is the second MPC meeting in a row where the bank has opted to keep the repo rate unchanged, a move that was widely expected by most economists.


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It comes as the Sarb signalled the end of its cutting cycle at its previous meeting in September, despite easing inflation.

The prime commercial bank lending rate remains at a more-than 40-decade low of 7%.

The decision, announced by Sarb Governor Lesetja Kganyago, follows the bank’s three-day MPC meeting in Pretoria.


Kganyago said consumer price inflation has been marked down to 3.2% for 2020, 3.9 for 2021 and is unchanged for 2022 at 4.4%.


The governor said that easing lockdown restrictions supported economic growth, “with high-frequency indicators continuing to show a pickup in economic activity during August and September. Growth in the third quarter of 2020 is expected to be 50.3% quarter-on-quarter saar.

In a surprise move, Kganyago announced that the central bank now expects South Africa’s GDP for 2020 to come in at -8%. This is slightly better than the bank’s September prediction of a contraction of 8.2%.

Image: Sarb

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