Economics
S. Africa Holds Key Rate and Signals Hiking May Start Sooner
- Repurchase rate held at 3.5% as MPC lifts inflation forecast
- Of five MPC members, three favored the unchanged stance
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South Africa’s central bank held its benchmark interest rate for a third straight meeting and signaled that tightening may start sooner than previously indicated.
The monetary policy committee kept the repurchase rate at 3.5%, Governor Lesetja Kganyago said Thursday in an online briefing. The implied policy rate path of the central bank’s quarterly projection model now indicates two increases of 25 basis points in the second and third quarters of 2021, which means tightening may start earlier than it suggested in November. However, future decisions will be “sensitive to the balance of risks to the outlook,” Kganyago said.