BREAKING: Interest rate remains unchanged- Reserve Bank
The SA Reserve Bank’s monetary policy committee (MPC) disclosed that despite the effect of the pandemic, the interest rate would remain unchanged at 3.5% on Thursday.
The Bank also revised its GDP forecasts.
It revealed that it is expecting the economy to shrink 8.2% in 2020, compared to the 7.3% contraction forecast in July.
It also expects the economy to grow by 3.9% in 2021 and by 2.6% in 2022.
The bank had slashed repo rates five times this year in a bid to support households and businesses through the devastating effect of the pandemic and lockdown
This remains the lowest policy rate the bank has implemented in about 47 years.
The Bank’s headline consumer price inflation forecast averages 3.3% in 2020 which is lower than previously forecast at 4% in 2021 and at 4.4% in 2022.
The MPC decision on the interest comes after President Cyril Ramaphosa announced on Wednesday night that SA will move to level 1 lockdown regulations from Sunday’s midnight.
This new move could bring about economy recovery.
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