* Trims 2012 growth forecast to 2.6 pct
* Rising food, fuel prices main risk to CPI outlook
(Adds details, quotes)
PRETORIA, Sept 20 (Reuters) – South Africa’s Reserve Bank
left its repo rate unchanged at 5.0 percent on Thursday, as
expected, saying there was no need for more monetary loosening
after a “pre-emptive” cut in July to combat challenging global
and domestic growth.
However, the bank cut its 2012 growth forecast to 2.6
percent from 2.7 percent predicted in July, with Governor Gill
Marcus saying growth in Africa’s biggest economy was expected to
remain weak while questions remained about levels of U.S.
government debt.
Twenty-five of 28 economists polled by Reuters had forecast
that the Monetary Policy Committee (MPC) would keep the repo
rate – at which it lends to commercial banks – unchanged after
a surprise 50 basis point cut in July.
“At its previous meeting the MPC assessed that conditions
justified a pre-emptive loosening of the monetary policy
stance,” Marcus said.
“Although global and domestic growth conditions remain
challenging, the MPC is of the view that a further reduction in
the repurchase rate is not appropriate at this stage.”
The decision was unanimous although Marcus said there was
some discussion about another rate during the MPC’s three days
of deliberations.
The repo rate is at 40-year lows and only eight out of the
28 surveyed economists expect another reduction this year, at
the bank’s November meeting.
Continued…
