THE South African Reserve Bank (SARB) kept its benchmark rate unchanged arguing the risks to its inflation outlook remained balanced.
The repo rate remained at 3.5 percent after the bank last year slashed it by 300 basis points to shield the economy from coronavirus imposed lockdowns that shackled economic activity at home and abroad pushed inflation to the lowest in 16 years.
“Monetary policy eased financial conditions and improved the resilience of households and firms to the economic implications of Covid-19, and continues to be accommodative,” Governor Lesetja Kganyago told a press briefing after a meeting of the bank’s Monetary Policy Committee.
He added that the Bank has also taken important steps to ensure adequate liquidity in domestic markets and that regulatory capital relief has also been provided, sustaining lending by financial institutions to households and firms.
South Africa’s economy is forecast to have contracted by about 8 percent last
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