The South African Reserve Bank has announced its decision to keep the repurchase rate unchanged at 8.25 percent, citing a decline in inflation over the past three months. Headline inflation, which had surged to the upper end of the target range, is expected to gradually return to the mid-point of the target range by the third quarter of 2025, according to Lesetja Kganyago, the governor of the central bank.
Addressing a press briefing, Governor Kganyago emphasized the monetary policy committee’s objective to firmly anchor inflation expectations around the midpoint of the target band, while instilling greater confidence in achieving the inflation target sustainably in the long term.
With a notable drop in core goods and food inflation in the near future, the central bank has revised down the inflation forecast for 2023 to 6 percent.
Recent official data revealed that South Africa’s inflation rate fell to 5.4 percent in June, showing a positive trend as compared to May’s 6.3 percent.
The decision to maintain the current repurchase rate comes as the South African Reserve Bank closely monitors economic indicators, seeking to strike a balance between fostering economic growth and ensuring price stability. The central bank’s cautious approach aligns with its commitment to effectively manage inflationary pressures and support the country’s economic recovery.
