The South African Reserve Bank\u2019s monetary policy committee on Thursday (17 January) voted to keep the repo rate unchanged at 6.75%.<\/p>\n
Speaking on the announcement Reserve Bank Governor, Lesetja Kganyago, said that the growth forecast for 2019 is 1.7% and remains unchanged\u00a0at 2% in 2020.<\/p>\n
CPI inflation is now expected to peak at around 5.6%, in the first quarter of 2020.<\/p>\n
Core inflation is expected to remain unchanged at 4.3% in 2018 & forecast to average 5.0% in 2019 and 5.1% in 2020, he said.<\/p>\n
“The MPC continues to assess the stance of monetary policy to be\u00a0broadly accommodative.<\/p>\n
“Monetary policy actions will continue to focus on anchoring inflation expectations closer to the mid-point of the inflation target,” Kganyago said.<\/p>\n
“The approach of the MPC is to look through the first-round effects and focus on the possible second-round effects on supply side shocks.\u00a0 As previously indicated, any future policy adjustments will be data dependent.”<\/p>\n
Unchanged rate welcomed<\/strong><\/p>\n The unchanged rate has broadly been welcomed.<\/p>\n We need stability so that we can get on with rebuilding confidence and the economy, says Samuel Seeff, chairman of the Seeff Property Group.<\/p>\n Seeff said 2019 is a \u201cyear of great expectation\u201d and the decision to retain the rate is the right one.<\/p>\n “Although inflation is a concern, it is weighted by the reasonably stable rand, declining fuel price, and Moody\u2019s keeping the sovereign credit rating and outlook stable with a gradual strengthening of institutions and increasing transparency.<\/p>\n “While we look forward to a much improved year, the reality remains a sluggish economy and we therefore simply cannot afford any further shocks for the economy,” he said.<\/p>\n
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