SA Reserve Bank keeps interest rates unchanged

SA Reserve Bank keeps interest rates unchanged
JOHANNESBURG - South African Reserve Bank (Sarb) Governor Lesetja Kganyago announced today, the bank's latest decision on interest rates after a three-day meeting of the monetary policy committee (MPC) he chairs.

Ahead of the meeting, many economists from the financial world predicted that South Africa's central bank was likely to keep its benchmark repo rate unchanged. 

Kganyago announced that the MPC decided to keep the interest unchanged at 6.75%. 
Kganyago said, "T he main drivers of the forecast are a lower starting point for food and services inflation, and the revised oil price assumptions. Food price inflation is now expected to average 3.7% in 2019.(down from 4.1%) "

In March, the SARB's monetary policy committee unanimously decided to keep the repo rate at which it lends to commercial banks unchanged as it cut its economic growth forecast. The MPC however warned of inflationary pressure in the months ahead stemming from increases in electricity tariffs, fuel prices and the rand exchange rate.

Investec economist Kamilla Kaplan said the effect of higher energy price inflation, reflecting the R1.31 per litre and 82 cents per litre increases in petrol and diesel prices respectively, would likely be partially countered by contained food price growth.

WATCH the Reserve Bank Governor Lesetja Kganyago make the announcement below: