Repo rate remains at 8.25% – Kganyago
South Africans don’t have to deal with an interest rate hike ahead of the festive season, as the repo rate remains steady at 8.25%.
The broadly expected decision was announced by SA Reserve Bank (Sarb) Governor Lesetja Kganyago on Thursday, following the bank’s last Monetary Policy Committee (MPC) meeting for 2023.
This means the prime lending rate of commercial banks also remains unchanged, at 11.75%.
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The MPC’s decision came despite the latest consumer price inflation reading for October hitting a five-month high. It came in higher-than-expected at 5.9%, on the back of higher fuel prices in the month and load shedding piling pressure on bird-flu-hit poultry producers.
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Even with the ‘hold’ announcement, the central bank still voiced a hawkish tone, with repo rate cut only likely in the second quarter or latter months of 2024.
It is the third consecutive time that the Sarb has decided to keep rates steady, following an aggressive hiking cycle of a cumulative 475 basis points since late 2021, to fight off spiralling inflation.
On Thursday, Kganyago warned that risks to SA inflation remained high, with food inflation ticking higher in October.
Source: moneyweb.co.za
