Reserve Bank keeps rates on hold at 3.5%

25th March 2021

By: News24Wire

  

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The Reserve Bank has kept the repo rate on hold at 3.5%, in line with economists' expectations.

Governor Lesetja Kganyago made the announcement on Thursday.

The decision was unanimous as all five Monetary Policy Committee members voted to hold.

Members see inflation remaining relatively contained into 2021 - the bank revised its headline consumer inflation forecast to 4.3%, from 4%. The forecast for 2022 was revised lower from 4.5% to 4.4%. "The overall risks to the inflation outlook appear to be balanced," said Kganyago.

The Reserve Bank forecasts first growth to be -0.2%, down from 1%, since the January MPC meeting. However, stronger quarterly outcomes are expected for the remainder of the year. The bank revised its growth forecast for 2021 from 3.6% to 3.8%, having considered possible new waves of Covid-19 infections and constraints to energy supply.

"Getting back to pre-pandemic output levels will take time," said Kganyago. GDP is expected to grow by 2.4% in 2022 and by 2.5% in 2023.

Edited by News24Wire

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