* SARB cuts inflation forecasts, admits weak rand poses risk
* International oil prices moderating
* Global uncertainty undermining local growth
(Changes dateline, adds quotes, background, reaction)
By Xola Potelwa
JOHANNESBURG, May 24 (Reuters) – South Africa’s central bank
left its repo rate steady as expected on Thursday, sounding a
warning about the effects of a bleak global outlook on the
fragile domestic economy but saying inflation was likely to
moderate.
Africa’s biggest economy and a leading emerging market is
struggling to gain traction after a 2009 recession, especially
as exports to the euro zone – its biggest trading partner –
stutter while Europe wallows in its debt crisis.
The bank admitted the inflation picture was muddier than at
the previous policy meeting two months ago, however, due to the
effects of a sharply weaker rand.
“In this highly volatile and uncertain environment the MPC
is of the view that it is appropriate to maintain the current
accommodative monetary policy stance,” Governor Gill Marcus
said, holding the repo rate at 5.5 percent.
All 31 economists polled by Reuters last week expected the
bank’s Monetary Policy Committee to keep the rate at which it
lends to commercial banks at three-decade lows to help support
economic growth.
Continued…
