Kganyago: Sarb won’t hesitate to increase repo rate
Lesetja Kganyago says inflation has continued to increase and the bank needs to keep the figure within the target range of between 3% to 6%.
He has announced that the rate will remain unchanged at 6.5% but has cited a number of concerns including a weaker rand and international trade tensions.
Kganyago says inflation has continued to increase and the bank needs to keep the figure within the target range of between 3% to 6%.
“The MPC will continue to be vigilant and will not hesitate to act should there be the second-round effect that takes us significantly away from the mid-point of inflation target range.”
The governor says this year's growth rate has been adjusted downwards due to weaker than expected quarterly figures.
“Following a broad-based contraction of 2.2% in the first quarter and early indications of modest growth in the second quarter, the Sarb’s forecast now indicates a growth rate of 1.2% for 2018 compared to 1.7% previously.”
But he says growth is expected to pick up.
“The forecast for our 2019 is 1.9%, marginally higher than the previous forecast of 1.7%, while the forecast for 2020 is unchanged at 2%.”
(Edited by Winnie Theletsane)