Rates unchanged as Sarb lifts growth forecast - as it happened | Fin24
 
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Rates unchanged as Sarb lifts growth forecast - as it happened

2016-09-22 14:48

SA Reserve Bank governor Lesetja Kganyago says the repo rate will remain unchanged, however the bank expects 0.4% growth for 2016 compared to zero previously.

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Last Updated at 07:36
22 Sep 15:56

22 Sep 15:55

22 Sep 15:48
Following the rates announcement, the rand is trading at R13.52 to the dollar.

22 Sep 15:42
 “There are approximately18 million credit users in South Africa. Around 50% of those credit users have an impaired credit rating due to high levels of debt. An increase in the interest rate would only place further financial pressure on consumers who are already strapped for cash,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “Hopefully the Reserve Bank’s hiking cycle has come to an end for the time being and consumers can use this window to sort out their financial affairs.”

22 Sep 15:40
First National Bank (FNB) will maintain its prime lending rate at 10.5% following the decision earlier taken today by the South African Reserve Bank (SARB) Monetary Policy Committee to leave rates unchanged until the final MPC meeting for 2016 on 24 November. The decision applies to all prime-linked accounts. “We are seeing a gradual recovery in business activity from a sharp contraction earlier in the year,” says FNB CEO Jacques Celliers. “Consumers, however, remain extremely cautious and low levels of confidence are restraining growth. We have seen an impressive growth in savings placed at FNB showing a high level of resilience in these tough times.” Yet, while activity remains at this low point, there are clear opportunities for expansion in sectors benefiting from currency weakness and lower prices such as property and tourism,” adds Mr Celliers.

22 Sep 15:40
Dr Andrew Golding: “Following the recent successful elections this is a further confidence boost for our economy and for those with existing mortgages or seeking finance for residential property acquisitions.”   Despite the fact that overall the residential property market in South Africa has experienced a slight slowing in activity since early 2015, Pam Golding Properties is experiencing stable and consistent sales turnover growth evidenced by year to date figures that are 10 percent higher than last year.

22 Sep 15:40
Dr Andrew Golding: “The fact that interest rates have levelled off and remained stable following these last two MPC meetings sends a positive message to home buyers and the residential property market in general. 

22 Sep 15:39
Welcoming today’s decision by the Monetary Policy Committee meeting to again hold the repo rate steady, Dr Andrew Golding, CE of the Pam Golding Property group, said that South Africa’s housing market continues to demonstrate maturity and ongoing resilience. 

22 Sep 15:39
Back to reactions now...

22 Sep 15:38
Kganyago: Concludes his briefing.

22 Sep 15:38
Kganyago: Four meetings ago I already said that we are not moving step by step with what the Fed does. Our decisions are based on our assessment of the SA economy what we deem to be in the best interest of the SA economy.

22 Sep 15:38
Kganyago: Whatever decision we take, we remain data dependent.

22 Sep 15:38
Kganyago: We are still highlighting that there are risks to the inflation outlook and should they change suddenly it would force us to revisit our assessment. We take that assessment at at each MPC meeting.

22 Sep 15:35
Kganyago: Inflation outlook is better than what we saw in July and that has enabled us to pause for longer, but we are also saying that if the inflation outlook as we have projected it continues, if those are realised, we are saying inflation is expected to remain in the target range for longer and then we might be reaching the end of the tightening cycle.

22 Sep 15:35
Back to Kganyago now who is fielding media questions...

22 Sep 15:34
Johan Gouws: The decision to keep rates unchanged was therefore a case of the SARB following a pragmatic approach with regards to monetary policy as they considered the broader context within which their mandate of price stability is adhered to.

22 Sep 15:34
Johan Gouws: A rate hike in the US would have put the rand under additional pressure considering the current political uncertainty.

22 Sep 15:34
Johan Gouws: A delay by the Federal Reserve in the United States (US) to raise interest rates also provided for less pressure on the SARB to raise rates in order to avoid a potential outflow of foreign investments.

22 Sep 15:30
Johan Gouws: Given the focus on a possible credit rating downgrade any risk to further dampening economic growth prospects had to be avoided at all costs and raising interest rates would have resulted in increased concerns about local growth prospects.

22 Sep 15:30
Johan Gouws: Inflation remains a concern, but were not a large enough threat in terms of price stability when considering the weak local economic outlook for 2016.

22 Sep 15:30
Johan Gouws, head of Absa asset consultants: Having already raised interest rates by 0.75% during 2016 the Monetary Policy Committee of the South African Reserve Bank (SARB) had some room to maneuver in making their decision to keep interest rates unchanged today.

22 Sep 15:29
Chairman of the Seeff property group, Samuel Seeff says that the decision by the Monetary Policy Committee of the South African Reserve Bank to leave the repo rate unchanged is most welcome in a climate where the economic and housing market outlook remains weak. Save for any major dilemma, it also now seems likely that we will see the year out without any further interest rate hikes, he adds.

22 Sep 15:29
Jacques du Toit: Recent high-frequency domestic data releases (mining production, manufacturing production, retail sales, new vehicle sales and the leading business cycle indicator) point to continued poor economic growth prospects in the near term. However, macroeconomic trends and inflationary pressures will be closely monitored and further rate hikes in coming months cannot be ruled out.

22 Sep 15:28
Jacques du Toit: Factors that prompted the MPC in keeping the repo rate unchanged include a strengthening rand exchange rate in recent weeks, less upward pressure on inflation, a subdued economic performance in the first half of the year, continued financial pressure on households and businesses and indications of a continued relatively subdued cycle of monetary policy tightening in the US.

22 Sep 15:27
Jacques du Toit, property analyst at Absa Home Loans: Based on a number of economic and interest rate-related factors, the Reserve Bank’s Monetary Policy Committee (MPC) decided to leave the key monetary policy interest rate – the repo rate – unchanged at a level of 7% per annum at its penultimate meeting of 2016. This caused commercial banks’ prime lending base rates for extending credit to the consumer and business sectors to remain stable at 10,5% per annum.

22 Sep 15:27

22 Sep 15:24
Kganyago: Time for media questions.

22 Sep 15:24
South African Reserve Bank governor Lesetja Kganyago has announced that the monetary policy committee has decided to leave the interest rate unchanged.

22 Sep 15:22
Kganyago: MPC remains concerned about overall inflation trajectory.

22 Sep 15:22

22 Sep 15:20
Kganyago: Rand remains vulnerable to local and global shocks.

22 Sep 15:19
Kganyago: Domestic petrol price expected to increase in October.

22 Sep 15:18
Kganyago: Global food price inflation has increased mainly due to sugar prices.

22 Sep 15:17
Kganyago: Slow pace of real disposable income of households.

22 Sep 15:17
Kganyago: Exports of motor vehicles have remained robust.

22 Sep 15:16
Kganyago: In July retail trade sales declined further.

22 Sep 15:16
Kganyago: Consumption expenditure by households remains weak and consumers remain under pressure.

22 Sep 15:15
Kganyago: Private sector fixed investment reflects low levels of business confidence.

22 Sep 15:14
Kganyago: Stresses are evident in the construction sector.

22 Sep 15:14
Kganyago: Estimates of potential output growth are unchanged.

22 Sep 15:13
Kganyago: SA economy remains weak.

22 Sep 15:13
Kganyago: Rand remains vulnerable to future changes in US and to a possible ratings downgrade later this year.

22 Sep 15:13
Kganyago: Trade surplus is not expected to sustain at similar levels in coming months.

22 Sep 15:12

22 Sep 15:12
Kganyago: Rand initially appreciated in line with other emerging market currencies as chances of US Fed tightening grew.

22 Sep 15:11
Kganyago: Rand has been affected by global trends and domestic political developments.

22 Sep 15:10

22 Sep 15:10
Kganyago: Market expectation regarding Fed interest rate hikes remain uncertain.

22 Sep 15:10

22 Sep 15:09
Kganyago: Chinese economy appears to have stabilised – concerns about the financial sector persists.

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