The Governor of the South African Reserve Bank (SARB), Lesetja Kganyago, declared on Thursday afternoon that the Monetary Policy Committee (MPC) has reached a unanimous decision to maintain the repurchase rate (repo rate) at 8.25%.
“At the current repurchase rate level, policy is restrictive, consistent with the inflation outlook and the need to address rising inflation expectations.
Serious upside risks to the inflation trajectory from global and domestic sources are evident and the economic outlook is highly uncertain,” Kganyago said.
The Reserve Bank Governor explained that the inflation and repo rate projections from the Quarterly Projection Model remain a broad policy guide, frequently changing in response to new data.
“Future committee decisions will be data dependent and sensitive to the balance of risks to the outlook,” he said.
Kganyago explained that guiding the inflation rate to the mid-point of about 3 to 6% is imperative while the inflation rate stands at 5.1%.
“Guiding inflation back towards the mid-point of the target band will improve the economic outlook and reduce borrowing costs.
“Since early 2020, the committee has recommended additional means of strengthening economic conditions, including achieving a prudent public debt level, increasing the supply of energy, keeping administered price inflation low and real wage growth in line with productivity gains.
“Such steps would also strengthen monetary policy effectiveness and its transmission to the broader economy,” he concluded.
Compiled by Warren Hawkins
