Repo rate remains unchanged

The Reserve Bank’s monetary policy committee has decided to keep interest rates on hold at 5,75 percent.

Reserve Bank Governor Lesetja Kganyago. Picture: Reinart Toerien/EWN

JOHANNESBURG - South African Reserve Bank Governor Lesetja Kganyago has confirmed the repo rate will remain unchanged.

The Reserve Bank's Monetary Policy Committee (MPC) has decided to keep interest rates on hold at 5,75 percent.

The prime lending rate, the interest charged by banks to consumers, remains steady at 9,25 percent.

Speaking in Pretoria, Kganyago said the decision was to keep rates on hold "for now".

He also said the relief offered to consumers through lower petrol prices was likely to be short-lived.

"The impending fuel and Road Accident Fund levies will have reversed a large part of the favourable impact on domestic petrol prices."

Kganyago says that the rand remains weak against the American dollar which means there's a risk that inflation could rise.

"Given the uncertainties related to the US policy normalisation and the weak state of the domestic policy, the NPC has unanimously decided to keep the repurchase rate unchanged for now."

In January, the bank's MPC decided to leave interest rates unchanged.

UNCHANGED REPO RATE WELCOMED

The Reserve Bank's decision to keep the repo rate unchanged has been welcomed by homeowners and money-borrowers.

Kganyago says the rate will be subject to continuous review.

"The NPC will remain vigilant and will not hesitate to act in order to maintain the integrity of the Inflation Targeting Framework."

Nedbank economist Isaac Matsego says while today's outcome was expected, external factors such as increases in fuel prices will likely see an increase in rates.

"Although it stated that the bridge will be temporary, we really expect parts of the interest rate to be upwards from now onwards."