Repo rate unchanged

2013-01-24 16:43

The Reserve Bank left its benchmark repo rate unchanged at 5%, citing concerns about rising food prices and a depreciating rand exchange rate in a period of slowing growth.

All 23 economists polled by Reuters last week forecast that the Reserve Bank’s monetary policy committee would leave rates unchanged at 40-year lows, with 10 economists expecting the next move to be a 50 basis point hike in 2014.

Peter Attard Montalto, emerging market economist at Nomura, said: “SA Reserve Bank monetary policy committee keeps rates on hold as expected in a statement that was broadly neutral.

More positive on global growth risks, but more bearish on domestic growth it would seem, while showing more concern by inflation (from wages in particular) versus last time.

“The growth-inflation conundrum continues, but with the rand doing this and the increased risks highlighted of wage pass through (something that got mentioned a lot), it seems they will now keep rates on hold for the next year and a half without a marked additional growth shock alongside the presence of no signs of a wage-price spiral.”

The rand weakened after the decision and traded at 9.0760 against the dollar 9.0355 just before governor Gill Marcus made her announcement.

The yield on the 14-year benchmark bond rose to 7.355% from 7.30% beforehand.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.