Interest rate hiking cycle appears to be at an end - Kganyago

The central bank's Lesetja Kganyago cited a stronger rand and decreasing food prices for the unchanged rate, but says that inflation is still a problem.

FILE: Reserve Bank Governor Lesetja Kganyago. Picture: Renart Toerien/EWN.

JOHANNESBURG – Reserve Bank Governor Lesetja Kganyago says the cycle of hiking interest rates appears to be at an end, but this could change if domestic and international pressures increase.

He has announced that the repo rate will remain unchanged at 7%.

The governor has cited a stronger rand and decreasing food prices, but says overall inflation is still a problem.

“The NPC retains the view that we may be at the end of the hiking cycle, however should second round effects emerge – that undermine the longer term inflation outlook – there could be a reassessment of this view.”

He also says that the bank is watching international developments closely and is still uncertain about the new US administration.

“There is still a great deal of uncertainty regarding the policies of the new administration with respect to the size of the promised fiscus stimulus.”

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(Edited by Masechaba Sefularo)