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Rates remain on hold

Johannesburg - The Reserve Bank left its repo rate unchanged at 5.5% on Thursday, which was widely expected by analysts.

The decision came after a slew of data showed that SA's economic growth was on track.

Consumer price inflation for February remained unchanged at 3.7%. After its last Monetary Policy Committee meeting in February, Reserve Bank governor Gill Marcus warned of a higher inflation outlook, spurred by rising global costs for fuel and food.

Analysts will scrutinise Thursday's statement for signs of hawkishness, which will indicate when the interest rate hikes will start. Most expect the tightening to commence only in 2012 but if the inflation forecast is significantly higher, some expect increases late this year.

The repo rate was cut by 50 basis points in November, taking it to 5.5% and making it the lowest in almost 30 years.

The Reserve Bank has cut the repo rate by 650 basis points since December 2008, in a bid to boost economic growth after the downturn.
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