Interest Rates remain unchanged – Relief for SA citizens

Some relief in the form of Money for South Africans today as the Monetary Policy Committee made their announcement on inflation forecasts on Thursday.

The decision comes a day before Moody’s Investors Service is expected to make its pronouncement on SA’s credit ratings, which analysts, who expect no change in the rating, have argued helped stay the MPC’s hand.

Since the previous meeting of the MPC, global growth concerns have increased, with particular weakness visible in some of our major trading partners.

The MPC unanimously decided to keep the repurchase rate unchanged at 6.75 percent per year.

Average inflation expectations have been declining since the end of 2017.

The forecast also takes into account the recent electricity tariff increases announced by the National Energy Regulator.

The SARB now expects GDP growth for 2019 to average 1.3 percent (down from 1.7 percent in January). The forecast for 2020 is 1.8 percent (down from 2.0 percent), rising to 2.0 percent for 2021.

SARB governor Kanyago Letsetja said, “the bigger than expected slowdown in the global economy, declines in business confidence, potential supply side-disruptions from load shedding and growing pressure on household disposable income.”

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