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Sarb taking cautious approach to repo rate - Kganyago

Reserve Bank Governor Lesetja Kgayago says inflation, poor business confidence, and political pressures are still impacting on the country's economy.

Reserve Bank Governor Lesetja Kganyago. Picture: EWN.

JOHANNESBURG – Reserve Bank Governor Lesetja Kgayago says the bank is taking a cautious approach to the repo rate, with inflationary pressures and a volatile rand causing concern.

The monetary policy committee has decided to keep the repo rate unchanged at 6.75%.

Kgayago says inflation, poor business confidence, and political pressures are still impacting on the country's economy.

But he says there is a slight improvement in the overall growth projection.

“The bank’s forecast for GDP growth for 2017 has been revised up marginally from 0.5% to 0.6%.”

However, the governor says that consumer confidence has improved with the public spending more, with food inflation also expected to decrease.

“Food price inflation is forecast to reach a low turning point of 4.8% in the first quarter of 2018, and to average 7.3% in 2017.”

Kgayago says that inflation is expected to remain between 3% and 6% over the next two years, but that the Reserve Bank has remained cautions as there are too many other pressures affecting the economy.