JOHANNESBURG - South African Reserve Bank (Sarb) Governor Lesetja Kganyago announced today the bank's latest decision on interest rates following the three-day meeting of the monetary policy committee (MPC) which he chairs.
Kganyago announced that Sarb would be keeping interest rates unchanged at a media briefing held today.
Earlier this year in July, the Reserve Bank cut interest rates for South Africa down to to 6.5% per annum.
Kganyago said, "The MPC welcomes the sustained moderation in inflation outcomes and the fall in inflation expectations of about one percent since 2016. The Committee would like to see inflation expectations also anchored closer to the mid-point of the inflation target range on a sustained basis. Against this backdrop, the MPC unanimously decided to keep the repurchase rate unchanged at 6.5% per annum."
"Monetary policy actions will continue to focus on anchoring inflation expectations near the mid-point of the inflation target range in the interest of balanced and sustainable growth. In this persistently uncertain environment, future policy decisions will continue to be highly data-dependent, sensitive to the assessment of the balance of risks to the outlook, and will seek to look-through temporary price shocks," Kganyago further added.
The MPC unanimously decided to keep the repurchase rate unchanged at 6.5% per annum. pic.twitter.com/jIQw387OhD
— SA Reserve Bank (@SAReserveBank) September 19, 2019
Hopes for fuel-price relief and a cut in interest rates fizzled on Monday this week, after drone attacks on Saudi Arabia’s second-biggest oil refinery knocked out 5 percent of the world’s oil supply.
South Africa receives 40 percent of its crude oil from Saudi Arabia. Analysts warned that the attacks might pose a risk to the country's oil supply and force the South African Reserve Bank (Sarb) to put cutting interest rates on hold.
Kganyago said during his briefing, “The medium-term inflation outlook is largely unchanged. Electricity, food and fuel price inflation continue to shape the near and medium-term trajectory of headline inflation.”
“In the second quarter of this year, South Africa’s GDP rebounded from the contraction experienced in the first quarter, but economic activity levels still remain weak. While global growth remains resilient, recent indicators on trade and manufacturing have deteriorated and a range of downside risks to growth remain. Based on recent short term economic indicators for the mining and manufacturing sectors, the third quarter GDP outcome is expected to be muted.”
Electricity, food & fuel price inflation continue to shape the near & medium-term trajectory of headline inflation. Fuel price inflation is expected to average 2.4% in 2019 & to peak at 11.8% in Q1 of 2020. While food price inflation is expected to peak at about 6% in Q3 of 2020. pic.twitter.com/2FMnlBCy4W
Electricity prices came out higher than expected in August, at 11.8%, but remain in line with the forecast.
— SA Reserve Bank (@SAReserveBank) September 19, 2019
Global GDP is expected to slow to 3.2% in 2019 and rise to around 3.5% in 2020. pic.twitter.com/VmGwjuVe2v
— SA Reserve Bank (@SAReserveBank) September 19, 2019
%%%twitter https://twitter.com/KganyagoLesetja?ref_src=twsrc%5Etfw">@KganyagoLesetja pic.twitter.com/R9QRKiUTBI
— SA Reserve Bank (@SAReserveBank)
WATCH
Lesetja Kganyago announce the SA Reserve Bank's decision below
: