Cape Town – The monetary policy committee (MPC) of the South African Reserve Bank (SARB) has taken a decision not to change the repo rate, which is 6.75%.
Therefore the prime lending rate stays at 10.25%. The repo rate is the interest rate which the SARB charges commercial banks when they are lending them money.
Lesetja Kganyago the SARB governor said the ANC’s elective conference in December will likely to have an impact on the rand. He also went on to say that the petrol price is also likely to increase in December.
“Since the previous meeting of the Monetary Policy Committee upside risks to the inflation outlook have increased, mainly due to higher international oil prices and a weaker rand exchange rate,” Kganyago said.
Kganyago also went on to say that country’s domestic development outlook remains weak, ongoing its deviation from the commonly more positive international pattern.
“This may increase the pace of monetary policy tightening in the advanced economies, with possible implications for capital flows to emerging markets,” he added.
He also went on to say, “Depending on economic conditions, the MPC may choose to diverge from the suggested path and alternative paths could be generated that are still consistent with achieving the inflation target.”