SARB keeps rates unchanged, says unrest likely to slow recovery
South Africa's central bank said on Thursday that recent unrest would probably slow an economic recovery from the Covid-19 pandemic, as it left its repo rate unchanged at 3.5% in a unanimous decision.
The South African Reserve Bank (SARB) has now kept rates on hold in its last six meetings, diverging from some fellow emerging market central banks which have already started to raise rates.
Thursday's decision was in line with a Reuters poll published last week in which all of the 30 economists polled expected unchanged rates.
"Recent unrest and economic damage could have lasting effects on investor confidence and job creation," SARB Governor Lesetja Kganyago told a news confidence, adding that the economic knock from the unrest would negate the benefits of a strong first-quarter performance.
The bank kept its gross domestic product forecasts for 2021 and 2022 unchanged at growth of 4.2% and 2.3% respectively.
South Africa saw mass looting and arson last week in some of the worst civil unrest of the post-apartheid era.
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