South Africa’s baseline interest rate remains unchanged at 6.5% despite stable inflation

SOUTH AFRICA - Report 19 Sep 2019 by Iraj Abedian

Today, in a largely anticipated move, the SA Reserve Bank’s Monetary Policy Committee (MPC) voted to keep the benchmark interest rate unchanged at 6.5%, which also leaves the prime interest rate at 10%. The Reserve Bank had adjusted the repo rate for the first time in 2019 during end-July, cutting it by 25 basis points from 6.75%. ​

The decision to keep interest rates was unanimous, and Governor Lesetja Kganyago stated that “…monetary policy actions will continue to focus on anchoring inflation expectations near the mid-point of the inflation target range in the interest of balanced and sustainable growth.” He further noted that the implied path of policy rates over the forecast period generated by the Reserve Bank’s Quarterly Projection Model indicated no changes to the repo rate. However, he did insist that future monetary policy decisions will continue to be data dependent.

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