South Africa has kept the benchmark repurchase (repo) rate unchanged at 3.5% per annum for the second time in row, South African Reserve Bank (SARB) governor Lesetja Kganyago has announced.The repo rate is set by the central bank to influence the interest rates that banks can pass on to their customers for products such as mortgages, business and personal loans and savings.
Briefing reporters following a Monetary Policy Committee (MPC) meeting in Pretoria on Thursday, Kganyago said the committee expected economic and financial conditions to remain volatile for the foreseeable future.
“In this highly uncertain environment, policy decisions will continue to be data dependent and sensitive to the balance of risks to the outlook,” the governor said.
This is the second time the SARB has not decreased the repo rate since the advent of the Covid-19 pandemic in the country in March, the governor noted.
During that month, the MPC cut the repo rate by 100 basis while a second 100 basis points cut was announced in April.
This was followed by two 25 basis point decrease in May and a further 25 basis point cut in July, Kganyago said.
He said the monetary policy had eased financial conditions and improved the resilience of households and firms to the economic implications of Covid-19 and continued to be accommodative to the consumers.
“The bank has taken important steps to ensure adequate liquidity in domestic markets.
“Regulatory capital relief has also been provided, sustaining lending by financial institutions to households and firms,” he said.