Sumary of South Africa Leaves Benchmark Rate Unchanged at 3.5%:
- While the monetary policy committee unanimously voted to leave the benchmark interest rate at a record low 3.5% for a sixth straight meeting, the implied policy rate path of the central bank’s quarterly projection model now shows the repurchase rate at 3.79% by the end of 2021, compared with 4.07% at the previous MPC meeting.
- What Bloomberg Economics Says “The South African Reserve Bank continued to signal the fourth quarter as the target for resuming rate hikes, though weak demand and muted core inflation probably makes this time-line slightly ambitious.
- ” –Boingotlo Gasealahwe, Africa economist -Click here for the full REACT The central bank had planned to revise its economic growth forecast upward after a better-than-expected first-quarter expansion, but deadly riots, looting and arson that erupted in South Africa last week led it to keep its 2021 estimate unchanged at 4.2%, Kganyago said.
- Article content “Recent events in the country, their impact on vaccinations, a longer-than-expected lockdown, limited energy supply and policy uncertainty pose downside risks to growth,” the governor said.
- Article content “There was a little more emphasis on the underlying risks to inflation,” Kevin Lings, the Johannesburg-based chief economist at Stanlib Asset Management, said by phone.
- ” The unchanged stance is likely to draw criticism from politicians and labor unionists, who say the Reserve Bank should be doing more to support an economy that contracted the most in a century last year and reduce unemployment that’s at a record high.
- Foreigners have been net sellers of South African equities for 31 of the last 37 trading sessions through Wednesday, pulling $2.63 billion from the domestic market.
- Cumulative outflows from South African securities markets have now reached more than $7.69 billion this year.