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SARB holds rates in shadow of election

Reserve Bank Governor Lesetja Kganyago

Reserve Bank Governor Lesetja Kganyago

Photo by Bloomberg

30th May 2024

By: Bloomberg

  

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The South African Reserve Bank (SARB) left borrowing costs unchanged, delivering the widely expected verdict one day after the nation held pivotal elections.

The monetary policy committee kept its benchmark interest rate at a 15-year high of 8.25% for a sixth consecutive meeting, Governor Lesetja Kganyago said at a press conference north of Johannesburg on Thursday.

That matched the estimate of all 22 economists in a Bloomberg survey. They anticipated the central bank would maintain its stance to help quell price pressures and keep a low profile in the shadow of what is turning out to be the closest election in 30 years.

“The committee remains concerned that inflation expectations are elevated,” Kganyago said. “Although the MPC assesses the inflation forecast risks to be broadly balanced at present, high inflation expectations require that we deliver on our target sooner rather than later, to re-anchor expectations.”

The hold decision was backed by all six MPC members, he said.

The rand was little moved by the decision. It traded 1% weaker at 18.5767 per dollar 3:13 p.m., similar to the level it was trading at before Kganyago announced the monetary policy stance.

Edited by Bloomberg

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