Reserve Bank on decision to keep interest rates unchanged

The Reserve Bank's Monetary Policy Committee says its decision to keep rates on hold was unanimous.

FILE: South African Reserve Bank governor Lesetja Kganyago. Picture: AFP.

CAPE TOWN - The Reserve Bank's Monetary Policy Committee says its decision to keep rates on hold was unanimous, and that risks to inflation and economic growth are finely balanced.

The bank has also announced that it's now raised its forecast for economic growth for this year.

It had earlier said the economy would not grow at all, but now says it's expecting growth of about point four percent.

The bank's governor Lesetja Kganyago says it's clear business are lacking confidence in the economy.

"Private sector fixed investment has recorded negative or zero growth for six consecutive quarters, reflecting low levels of business confidence."

He also says that while the rand has been stronger than forecast over the last few weeks, there is a high risk that that could change.

"The rand, however, remains vulnerable to future changes in the US monetary policy stunts, domestic political developments as well as to a risk of possible ratings downgrade later in the year."