Sarb worried about SA's economic situation

Lesetja Kganyago says the MPC was unanimous when deciding to keep the repo rate unchanged.

Newly appointed Reserve Bank governor Lesetja Kganyago at his appointment in Pretoria on 06 October 2014. Picture: Reinart Toerien/EWN.

JOHANNESBURG - Reserve Bank Governor Lesetja Kganyago says the Monetary Police Committee (MPC) was unanimous when deciding to keep the repo rate unchanged, but it's worried the country's economic situation may change soon.

The governor says electricity supply and low business and consumer confidence are worrying factors but the exchange rate is the main threat to inflation.

"There are a number of risks to the upside inflation outlook. The primary one being the exchange rate."

But Kganyago says the oil price has dropped by around $10 a barrel since its last meeting in July, with petrol going down by around R1.20.

He says all these factors have been taken into account.

"The MPC has to achieve a fine balance between realising its core mandate and not undermining its short term growth."

Inflation for August was 4.6 percent and the governor says the figure must not breach the 3 to 6 percent target range.

If it does, the MPC may be left with no choice but to hike the repo rate, which will be welcomed by pensioners but not by cash-strapped South Africans.