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Reserve Bank keeps repo rate unchanged at 3.5%

Prior to Thursday's announcement, the bank's Monetary Policy Committee had cut the repo rate by 275 basis points this year to try and counter the effects of negative growth due to COVID-19.

South African Reserve Bank Governor Lesetja Kganyago. Picture: AFP

JOHANNESBURG - South African Reserve Bank (Sarb) Governor Lesetja Kganyago has announced the repo rate will remain unchanged at 3.5%

He also gave a forecast of the next year.

“The implied policy rate path of the quarterly projection model indicates no further repo rate cuts in the near term and two increases of 25 basis points in the third and the fourth quarters of 2021.”

The governor says growth has been revised to a contraction of 8% for this year, but is expected to bounce back somewhat over the next two years.

Prior to Thursday's announcement, the bank's Monetary Policy Committee had cut the repo rate by 275 basis points this year to try and counter the effects of negative growth due to COVID-19.

In an emergency meeting in April the bank cut the repo rate by 100 basis points, followed by a 50 basis point cut to 3.75% during its May meeting.

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