JOHANNESBURG, March 27 (Xinhua) — The South African Reserve Bank (SARB), the country’s central bank, on Wednesday decided to maintain its repurchase rate at the current level of 8.25 percent despite elevated inflation expectations.
At this level of rates, the policy stance is considered restrictive and consistent with the inflation outlook and the need to address elevated inflation expectations, said SARB Governor Lesetja Kganyago while announcing the latest monetary policy.
The latest data from Statistics South Africa showed that the country’s consumer inflation increased to 5.6 percent in February from 5.3 percent in January, with core inflation rising to 5 percent.
“This rise in core inflation was due to an acceleration in services, led by the medical aid component. Services inflation is now at its highest since 2019. This suggests that South Africa is joining the global trend of services, rather than goods, becoming a major source of inflation,” Kganyago said.
Though inflation expectations have moderated in the latest survey, the two-year ahead expectations are still in the top half of the target range, Kganyago noted.
The SARB forecast that the South African economy would record modest growth from this year as the supply-side constraints relax. “In particular, we expect the load-shedding burden will ease somewhat,” Kganyago said.
Source Agencies
