National
Economist: Announcement by South African Reserve Bank expected─── MARK STEENBOK 19:53 Thu, 21 Jul 2016
Bloemfontein - An economist says the announcement today by the South African Reserve Bank (SARB) governor, Lesetja Kganyago, that there would be no change in the interest rate, was expected.
Kganyago announced that the Monetary Policy Committee has decided to keep the repo rate, which is the interest rate at which Sarb lends money to commercial banks, at 7%. The cost of borrowing stays at 10.5%.
The growth forecast for the country was downgraded from 0.6% to 0%.
Meanwhile, economist Freddie Mitchell says that the Reserve Bank had little room to make any drastic changes today…
"We see some significant pressures within the market, even consumer demand at this stage is not too buoyant. So at this stage we know that inflation is just above the target plan which is of concern. We also know that inflation is mostly driven by administration prices and cost with pressure. So I don’t think the Reserve Bank had much room to increase the rates today,” says Mitchell.
The rand, was trading at below R14.30/$ before the announcement and moved to R14.26 as Kganyago delivered the MPC statement.
- OFM News
