The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) kept the repo rate consistent at 7%, while the rand lost 2.5% against the greenback. This implies that the prime lending rate remains at 10.5%.
This global inflation is also a result of the fallout from the Middle East conflict.
The central bank emphasised risks to growth from weaker consumer and business confidence, and attributed the bulk of the inflation overshoot to rising fuel costs. It is currently trading at R16,81 cents to the dollar.
Lesetja Kganyago, SARB Governor, stated that the committee will proceed to monitor the global economic outlook.
“The committee decided to keep the policy rate unchanged at 7%. Four members preferred a hold, while two favoured an increase of 25 basis points. The committee agreed that the outlook is uncertain, and with the rate increase at our previous meeting, the policy stance is appropriate for now with rates somewhat restrictive,” said Kganyago.
