The Bank has decided to keep the repo rate unchanged at 3.5% after it had reduced the rate by 300 basis points so far this year.
Reserve Bank Governor Lesetja Kganyago. Picture: Renart Toerien/EWN.
JOHANNESBURG – While the Reserve Bank said its pleased that its monetary policy has helped households survive the coronavirus pandemic, it has revised its negative growth forecast for this year.
The Bank decided to keep the repo rate unchanged at 3.5%.
It has reduced the rate by 300 basis points so far this year, but said three out of five members of the Monetary Policy Committee voted to leave the rate unchanged.
Governor Lesetja Kganyago said the growth forecast for this year has been revised.
“A GDP contraction of 8.2% in 2020, compared to the 7.3% contraction in forecast in July.”
But he said the monetary policy has paid off.
“Monetary policy has eased financial conditions and improved the resilience of households and firms to the economic complications of COVID-19.”
Monetary policy has eased financial conditions and improved the resilience of households and firms to the economic implications of Covid-19. However, Monetary Policy alone cannot improve the potential growth rate of the economy or reduce fiscal risks. #SARBMPCSEP20 pic.twitter.com/ERPfXY4fBI
— SA Reserve Bank (@SAReserveBank) September 17, 2020
The governor said global and local inflation is in check, while oil prices are stable and all that remains is for the country to rebuild itself.