Still many factors that may contribute to inflation going up, cautions SARB
The SARB’s Monetary Policy Committee on Wednesday announced that the 8.25% repo rate will remain unchanged.
The South African Reserve Bank (SARB) governor, Lesetja Kganyago, in studio with Clement Manyathela in July 2023. Picture: Karabo Tebele/702.
JOHANNESBURG - The South African Reserve Bank (SARB) says there are still many factors that may contribute towards inflation going up that will lead to interest rate hikes.
The central bank's Monetary Policy Committee (MPC) left the repo rate unchanged at 8.25% at its second meeting of 2024.
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The reserve bank governor, Lesetja Kganyago, made the announcement on Wednesday.
Load shedding and the country's logistics are among the factors cited by Kganyago as possible contributors to the country's high interest rates.
Economist Dale McKinley said the SARB would continue to hike rates until the reasons mentioned as risks changed.
"As long as there is not much headway on that, we will continue to see the same kind of monetary policy adopted by the reserve bank."
According to Standard Bank economist Elna Moolmam keeping the repo rate unchanged makes sense.
"There is a resurgence in food price inflation, so it just makes sense for the reserve bank to still be hawkish in the near term."
The MPC will meet for its next meeting on 30 May.