PRETORIA, July 21 – South Africa’s Reserve Bank left its repo rate unchanged as expected on Thursday, saying a forecast that inflation would now breach its upper target level by year-end was balanced by risks to fragile economic growth.
The dovish tone of Governor Gill Marcus’s statement, which suggested monetary policy could remain accommodative this year, led government bonds to extend gains, pushing yields to their lowest levels in about two weeks.
The Bank’s monetary policy committee has now left rates on hold at its last four policy meetings after a two-year loosening cycle that ended in November 2010 and saw 650 basis points lopped off the repo rate, taking it to an historic low of 5.5 percent.
Source: Reuters Africa newsletter
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