JOHANNESBURG - Interest rates will remain unchanged, South African Reserve Bank Governor Lesetja Kganyago announced on Thursday.
Last month, the South-African Reserve Bank (SARB) kept its repurchase rate at 6,75 percent in September, despite calls by South Africans to lower borrowing costs in order to assist in boosting the economy after the country came out of recession earlier this year.
Economists today expected the Reserve Bank to keep rates on hold.
Governor Lesetja Kganyago, on Thursday announced the results of the he Monetary Policy Committee's results on inflation slowing down as well as the country's low economic growth.
The National Treasury earlier said it expected growth of just 0,3% far below the level needed to slash the country's official unemployment of almost 28%.
On South-Africa's economic growth, Kganyago said that the domestic economic growth outlook remained subdued but positive. "Both consumer and business confidence remain low and are also likely to be affected by political developments in December,” he said.
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Kganyago also said that upside risks to the inflation outlook had increased, mainly due to higher international oil prices as well as a weaker rand exchange rate “Despite a deteriorating in the forecast, inflation is expected to remain within the target range for rest of the forecast period,” he said.
On the projection of the rand, Kganyago said that rating agency reviews and the economic policy implications of the ANC electoral conference would be "likely to dominate rand movements over the coming weeks.”
“Downgrades of domestic currency debt to sub-investment grade could lead to South African government bonds falling out of key indices which require investment grade. Such an event could trigger significant sales of domestic bonds by non-residents.”
BUSINESS REPORT ONLINE
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