Johannesburg - South African Reserve Bank (Sarb) governor Gill Marcus expressed major concern over wage settlements that are putting pressure on the already deteriorating outlook for inflation and the economy. Marcus announced yesterday that the repo rate will remain at 5%. The rand edged up 0.61% to R9.51 after the announcement, following a fall by as much as 13c to the dollar in early trade reaching R9.69. The repo rate is the interest rate at which the Reserve Bank lends money to banks. Marcus said the Monetary Policy Committee (MPC) is increasingly concerned about the prospect of wage settlements well above inflation and productivity growth and the risk of protracted strike action, with negative implications for growth and exports.

Reuters