Reserve Bank keeps interest rates unchanged at 8.25%

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Reserve Bank Governor Lesetja Kganyago has announced that interest rates will remain steady. The repo rate will remain at 8.25% – meaning that the prime lending rate will stay at 11.75%.

The Governor says South Africa’s inflation rate remains sensitive to shocks like the oil price. Headline inflation for this year is expected to come in at 5.8%.

Kganyago says the electricity supply issue and the functioning of ports are essential factors for the economy. He says medium-term expectations remain elevated.

“Our GDP growth forecast for 2024 and 2025 is increased from the previous meeting to 1.2% and 1.3%, respectively, in large part due to an expected decrease in load-shedding.”

The Reserve Bank has raised rates cumulatively since November 2021 taking the repurchase rate to 8,25%.

The Bank says GDP growth for 2023 is revised slightly upward to 0.8% from the September figure of 0.7%.

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