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.
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.