<\/p>\n
The South African Reserve Bank\u2019s Monetary Policy Committee (MPC) left the repo rate unchanged at 7% on Thursday, in somewhat of a surprise move.<\/p>\n
The MPC\u2019s decision comes amid renewed inflationary pressure, with consumer inflation rising more sharply than anticipated to 5% in June, from 4.5% in May.<\/p>\n
Read:
Inflation resurgence puts another rate hike on the cards
Inflation rises to 5%, bolstering rate hike case<\/p>\n
This means SA\u2019s prime lending rate remains at 10.50%.<\/p>\n
ADVERTISEMENT<\/p>\n
CONTINUE READING BELOW<\/p>\n
Despite the deterioration in the inflation outlook, the central bank adopted a measured stance, balancing its mandate to contain price pressures with the need to avoid placing further strain on South Africa\u2019s fragile economic recovery.<\/p>\n
Sarb governor Lesetja Kganyago said while the MPC \u201csees upside risks to inflation,\u201d the committee decided to keep the policy rate unchanged, at 7%.<\/p>\n
Four members of the MPC preferred a hold, while two favoured an increase of 25 basis points.<\/p>\n
\u201cThe 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,\u201d he said.<\/p>\n
\u201cThe forecast from our Quarterly Projection Model [QPM] shows the policy rate broadly stable through the remainder of the year. The model shows cuts later in the forecast, as inflation falls to 3% and rates adjust towards neutral levels,\u201d he added.<\/p>\n
Rates staying higher-for longer?<\/p>\n
ADVERTISEMENT:<\/p>\n
CONTINUE READING BELOW<\/p>\n
\u201cFor expectations, after the upside surprise in the recent survey, we looked at what could happen if expectations keep on rising throughout this year. The scenario showed extra pressure on wages, which feeds through to core inflation. The model therefore sees tighter policy, with one more rate hike than the baseline forecast, and rates staying higher-for longer after that,\u201d Kganyago said.<\/p>\n
Commenting on the Sarb announcement, FNB chief economist Mamello Matikinca-Ngwenya, said the MPC\u2019s decision to keep the repo rate unchanged reflected a careful balance between SA\u2019s weak growth and inflation risks that have moderated since the previous meeting. <\/p>\n
\u201cDomestic activity remained subdued, with real GDP growth expected to improve only gradually from 1.1% in 2025 to around 1.2% in 2026, before strengthening to about towards 2.0% by 2028.\u201d\u00a0<\/p>\n
#Sarb #holds #rates #steady<\/p>\n","protected":false},"excerpt":{"rendered":"
The South African Reserve Bank\u2019s Monetary Policy Committee (MPC) left the repo rate unchanged at…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[830,2152,4830,2139],"_links":{"self":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/11838"}],"collection":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11838"}],"version-history":[{"count":0,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/11838\/revisions"}],"wp:attachment":[{"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11838"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11838"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11838"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}