Reserve Bank holds repo rate at 3.5%

As most market commentators and economists anticipated, the Monetary Policy Committee (MPC) of the South African Reserve Bank (Sarb) decided to keep the repo rate on hold at 3.5% on Thursday, following its latest meeting.

Consequently, the prime commercial lending rate remains at a more than 40-year low of 7%.

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

As part of its response to the economic fallout from the Covid-19 pandemic, the Sarb has already slashed the rate at which it lends money to commercial banks by 300 basis points since the beginning of this year.

The move to hold the repo rate this time round comes just a day after President Cyril Ramaphosa announced that South Africa would ease its Covid-19 restrictions to alert Level 1 over the next month. This would see the further opening up of the economy, in particular allowing international travel for the first time in more than six months as of October 1.

Source: moneyweb.co.za