Reserve Bank keeps repo rate unchanged
The South African Reserve Bank’s Monetary Policy Committee (MPC) has kept the interest rates on hold for a fourth consecutive time.
The MPC concluded its meeting on Thursday.
The repo rate stands at 3,5% while the prime lending rate is 7%.
The decision was unanimous.
“Monetary policy continues to be accommodative, keeping financial conditions supportive of credit demand as the economy recovers from the pandemic and associated lockdowns,” said the central bank’s governor, Lesetja Kganyago.
“Since the January meeting of the Monetary Policy Committee, a second wave of Covid-19 infections has come and gone, with lockdown restrictions further reduced. Until vaccination is widespread and populations develop sufficient immunity to curb virus transmission.
“Despite further expected waves, the start of vaccinations in many countries has lifted projections for global economic growth and boosted confidence significantly,” Kganyago added.
#SARBMPCMAR21 | JUST IN: The central bank has unanimously decided to keep interest rates unchanged.
— Jacaranda News (@JacaNews) March 25, 2021
Repurchase rate remains 3.5%; while prime remains 7%. pic.twitter.com/8kRNdKryKd
The country’s economy expanded by 6.3% on a quarterly, annualised basis in the fourth quarter of 2020, and contracted by 7% for the year overall.
The Bank’s forecast for GDP for the first quarter of 2021 stands at -0.2%, down from 1.0% at the time of the January MPC meeting.
The economy is expected to grow by 3.8%.
“Despite this more optimistic outlook, distribution of vaccines will be slow, contributing to an uneven pace of global economic recovery this year and next.”
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