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May 27 2012 11:21
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Pretoria - South African Reserve Bank Governor Tito Mboweni is confident local banks are stable and are not exposed to US subprime issues, he said on Thursday.
Mboweni also told a news conference no domestic banks had asked for help from the central bank because of the global financial crisis.
After a two-day meeting of the central bank's monetary policy committee, it has opted not to change the repo rate at which it lends money to commercial banks.
"The MPC is of the view that an unchanged monetary policy stance is appropriate at this stage. Accordingly the repo rate remains unchanged at 12% per annum," he said.
Mboweni said the committee had considered recent developments in the South African economy and the risks to the inflation outlook against the backdrop of conditions prevailing in the international financial markets.
"Developments in the international markets have already had a negative impact on growth in a number of regions, and global growth forecasts are being revised down further, particularly in the Organisation for Economic Co-operation and Development countries."
He said the continuing crisis had lead to a generally more accommodative monetary policy stance in a number of countries, and some governments and central banks taking unprecedented steps to help stabilise the situation.
The slowing world economy was also likely to have an adverse effect on domestic growth prospects.
"At this stage it is unclear how the crisis will unfold, but heightened risk and uncertainty are likely to persist for some time," he said.
- Sapa and Reuters