Reserve Bank leaves repo rate unchanged at 6.75%

Reserve Bank governor Lesetja Kganyago announced the decision of the bank's Monetary Police Committee on Thursday afternoon.

FILE: South African Reserve Bank Governor Lesetja Kganyago. Picture: AFP

JOHANNESBURG - South African Reserve Bank governor Lesetja Kganyago has announced the bank's Monetary Policy Committee has left the repo rate unchanged at 6.75%.

On Thursday, the governor said with declines in the business confidence index and potential disruptions from load shedding, the economy remains strained.

“The MPC assess the risks to the growth forecast to continue to be on the downside. Electricity supply constraints and weak business confidence will likely limit near term production and investment prospects.”

Kganyago said many of the challenges facing the economy were structural in nature.

“Given current economic vulnerabilities, prudent macro-economic policies combined with structural reforms that raise potential growth and lower the cost structure of the economy have become even more urgent.”

In January this year, it was announced that the repo rate would remain at 6.75%, with the governor citing improved inflation, a stronger rand and a better growth outlook as some of the factors the institution's Monetary Policy Committee took into account.

In November last year, the repo rate was increased by 25 basis points to 6.75%. At the time, Kganyago listed rising inflation and the weak rand as major factors.