[ALERT] Reserve Bank keeps repo rate unchanged at 6.75%

This is the second time the bank has kept the rate at this level after a 25 basis point cut in July.

FILE: Reserve Bank Governor Lesetja Kganyago. Picture: GCIS.

PRETORIA – South African Reserve Bank (Sarb) Governor Lesetja Kganyago has announced that the repo rate will remain unchanged at 6.75%.

The repo rate is the rate at which the central bank lends money to commercial banks.

The prime lending rate, which is the interest charged by banks to clients, will remain at 10.25%.

Kganyago says inflation remains within the Reserve Bank's target range of between 3% and 6% but there are various other risks.

However, he says the repo rate needs to stay unchanged for now.

“In light of the degree of uncertainty of the prevailing in the economy and the balance of risks, the MPC has decided that it would be prudent to maintain the current stance of monetary policy at this stage. Accordingly, the repurchase rate remains unchanged at 6.75% per annum.”

He has noted that consumer spending isn't changing.

“There are a very few signs of domestic demand pressures as reflected in core inflation outcomes. Although retail sales have suppressed on the upside, household consumption expenditure is expected to remain relatively subdued.”

The announcement comes after a meeting of the Monetary Policy Committee in Pretoria.

In September the bank also left the repo rate unchanged.

Back in July the bank cut the repo rate by 25 basis points to 6.75% after 16 months of keeping the rate unchanged.

FUEL PRICE

Motorists can expect hefty fuel price increases next month.

Kganyago has also announced that because of the weaker rand and rising oil prices, petrol prices will increase.

“Current under recovery suggest a further increase in the region of 70 cents per litre is likely in December.”