South Africa's central bank has opted to keep its policy rate steady, a decision taken by the majority of its policy board members who believe that the current stance is appropriate for stabilizing inflation within the target range of 4.5 percent.
The Monetary Policy Committee (MPC) announced that the repurchase rate will remain at 8.25 percent, a move anticipated by many economists. Out of the policymakers, four voted in favor of maintaining the current rate, while two advocated for a reduction of 25 basis points, citing an improved inflation outlook that could justify easing the restrictive measures.
"Projections still suggest that rates will ease into more neutral territory by next year," stated South African Reserve Bank (SARB) Governor Lesetja Kganyago.
Recent data revealed that the nation's consumer price inflation stood steady at 5.2 percent in June, positioning it in the upper half of the bank's target range. Looking forward, inflation for the current year is now forecasted at 4.9 percent, a slight downward revision from the previous 5.1 percent estimate.
The SARB anticipates inflation to dip below 4.5 percent over the upcoming quarters, influenced by decreasing fuel and food prices and the potential strengthening of the rand.
"We remain committed to stabilizing inflation at the mid-point of the target band," Kganyago emphasized. "Achieving this goal will enhance the economic outlook and help reduce borrowing costs."
