Sarb leaves repo rate unchanged at 7%

The South African Reserve Bank has announced the repo rate will remain unchanged at 7%.

FILE: Lesetja Kganyago. Picture: AFP.

JOHANNESBURG - South African Reserve Bank (Sarb) governor Lesetja Kganyago has announced the bank will leave the repo rate unchanged at 7 percent.

The prime lending rate, the figure charged by banks to customers, will remain at 10.5 percent.

This follows two rate hikes so far this year.

Kganyago says growth is still low but there are signs of a turnaround.

"The MPC felt that there is some room to pause in this tightening cycle and accordingly decided to keep the repurchasing rate unchanged for now at 7 percent per annum."

He says the rand is continuing to battle against the major currencies due to global growth concerns and the MPC won't hesitate to increase rates, but not for now.

"Five members preferred no change while one member preferred a 25 basis point increase."

In March the bank increased the repo rate, which is the rate at which the Sarb lends money to banks, by 25 basis points to 7 percent.

In January the bank hiked the repo rate by 50 basis points to 6.75 percent.