South African Reserve Bank Keeps Benchmark Rate Unchanged The South African Reserve Bank kept its benchmark interest rate unchanged for a seventh meeting as a rebound in the rand allowed policy makers to focus on fostering growth in Africa’s largest economy. The Monetary Policy Committee left the repurchase rate at 5 percent in a unanimous decision, Governor Gill Marcus told reporters today in Pretoria, matching the forecasts of all 20 economists surveyed by Bloomberg. The rand’s recovery from a four-year low against the dollar on Aug. 28 has given policy makers room to keep borrowing costs unchanged even as inflation exceeded the bank’s 3 percent to 6 percent target band for a second month in August. Marcus said that breach will probably be temporary, enabling the Reserve Bank to help foster growth in an economy that’s set to expand this year at the slowest pace since a 2009 recession. “We are still firmly in neutral mode in monetary policy,” Elize Kruger, an economist at KADD Capital in Johannesburg, said in a phone interview. “I doubt they will move pre-emptively in this current cycle because economic growth is still below potential growth. They are going to have to give the economy more time to recover before thinking of hiking rates.” The central bank kept its average inflation forecast for this year unchanged at 5.9 percent, while raising next year’s projection to 5.8 percent from 5.5 percent, and predicting 5.4 percent in 2015. Inflation accelerated to 6.4 percent in August from 6.3 percent in the previous month, in line with the median estimate of 23 economists surveyed by Bloomberg survey. bloomberg/news/2013-09-19/south-african-reserve-bank-keeps-benchmark-rate-unchanged.html
Posted on: Thu, 19 Sep 2013 15:10:12 +0000
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