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Cape Town - SA Reserve Bank (Sarb) governor Gill Marcus on Thursday announced that the repo rate will remain at 5.75%, citing the anaemic state of the domestic economy.
Click here to see how the announcement unfolded.
The decision was taken following its second-last monetary policy committee (MPC) meeting for the year.
"The MPC has decided that the repurchase rate will remain unchanged at 5.75% per annum," she said.
It was based on the improved inflation outlook, the stable inflation expectations and the downside risks to the weak growth outlook.
However, Marcus said the MPC is also mindful of the weak economy and increasing unemployment rates.
"Despite the 75 basis point increase so far this year, monetary policy remains accommodative, and will continue to be supportive of the domestic economy subject to achieving its primary inflation targeting objective," she said.
Marcus said domestic economic outlook has deteriorated since the last MPC meeting.
The Reserve Bank revised down the GDP forecast to 1.5% from 1.7% previously.
It also revised inflation forecasts to average at 6.2% in 2014 from 6.3% previously.
She said emerging markets generally are facing headwinds.
Marcus added that future decisions are highly data dependent.
The interest rates has increased by a cumulative 75 basis points this year so far. Sarb lifted the rate in January by 50 basis points and in July by 25 basis points.The repurchase rate is the interest rate at which the Sarb lends money to commercial banks.
Economists expressed mixed views on what decision the MPC would take, following better-than-expected retail sales figures and an increase in consumer inflation.
- Fin24
