{"id":22708,"date":"2013-09-19T20:54:55","date_gmt":"2013-09-19T18:54:55","guid":{"rendered":"http:\/\/www.myza.co.za\/reserve-bank-keeps-repo-rate-unchanged\/"},"modified":"2013-09-19T20:54:55","modified_gmt":"2013-09-19T18:54:55","slug":"reserve-bank-keeps-repo-rate-unchanged","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/reserve-bank-keeps-repo-rate-unchanged\/","title":{"rendered":"Reserve Bank keeps repo rate unchanged"},"content":{"rendered":"

<\/span><\/p>\n

The Reserve Bank has kept the repo rate unchanged at 5% per annum, it said on Thursday.<\/p>\n

Briefing reporters following the Monetary Policy Committee (MPC) meeting, Reserve Bank Governor Gill Marcus said that although the sustained breach of the bank\u2019s inflation target range was not central to forecast, upside risks to the inflation outlook required careful monitoring.<\/p>\n

\u201cShould the risks to the medium-term inflation outlook deteriorate significantly, the MPC will not hesitate to take appropriate action in order to maintain the integrity of the inflation targeting framework and to anchor inflation expectations at a lower level.<\/p>\n

\u201cAt this stage, however, given the global uncertainties and downside growth risks, the MPC has decided to keep the repurchase rate unchanged at 5% annum,\u201d said Marcus.<\/p>\n

South Africa\u2019s Consumer Price Index (CPI) rose to 6.4% year-on-year in August, again falling out of the Reserve Bank\u2019s inflation target range of 3% to 6%. In July, CPI rose to 6.3% year-on-year.<\/p>\n

Of this, the central bank said, the current breach of the target range was still expected to be temporary and that the peak was possibly reached in August.<\/p>\n

On a month-on-month basis, CPI increased by 0.3% in August, with fuel and food prices as the main offenders in the annual rise.<\/p>\n

CPI increased by 0.3% month-on-month in August, slowing from a 1.1% month-on-month rise in July.<\/p>\n

The bank\u2019s inflation forecast for 2013 was unchanged at an average of 5.9%, but now it was expected to average 5.8% in 2014, compared with 5.5% in the previous forecast. Meanwhile, the forecast for 2015 has been raised from 5.2% to 5.4%.<\/p>\n

The bank attributed the deterioration in the forecast mainly due to the exchange rate of the rand and petrol prices, \u201cbut given the overnight developments, these assumptions will be revisited on an on-going basis\u201d.<\/p>\n

The central bank noted that the exchange rate of the rand has been highly volatile since the last meeting of the MPC. This comes against the backdrop of a widening current account deficit, domestic labour disputes and the reversal of capital flows to emerging market economies.<\/p>\n

\u201cThe risks to the inflation outlook from the exchange rate remain elevated and dependent on its future trend. A sustained depreciation trend could pose a significant risk to the inflation outcome,\u201d said Marcus.<\/p>\n

The rand is expected to remain sensitive to global sentiment as well as to the current account deficit, which widened to 6.5% of Gross Domestic Product (GDP) in the second quarter of 2013.<\/p>\n

The deficit is expected to narrow in the coming months in response to the depreciated currency but this will be slow given the import-intensive nature of capital expenditure by state-owned enterprises in particular, noted the bank.<\/p>\n

\u201cExport revenues are hampered by weak external demand, strike activity in the mining and motor vehicles sectors in particular, and declining terms of trade. The stepping up of exports is critical to address the current account deficit,\u201d explained Marcus.<\/p>\n

The central bank also expressed concern at the trend of wage settlements.<\/p>\n

\u201cThe trend of wage settlements remains an upside risk to inflation and job creation. The current wage bargaining round has seen a wide range of settlements, generally above the current inflation rate. The overall average wage settlement rate in collective bargaining agreements was 7.9% in the first half of 2013, and this is likely to have increased in the third quarter.<\/p>\n

\u201cWe are concerned that the increase in productivity, although relatively low, reflects job losses and a switch to more capital intensive production,\u201d Marcus said at the second last MPC meeting of 2013.<\/p>\n

Market expectation was for the MPC to keep the repo rate unchanged.<\/p>\n

\u201cWe expect the MPC to leave rates unchanged given the continued dilemma of under trend economic growth\u2026\u201d said Nedbank in its weekly economic monitor earlier this week. \u2013 SAnews.gov.za<\/p>\n

\nThese businesses support MyPE<\/a>:<\/strong><\/p>\n

MyPE<\/a> supports PE business:<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The Reserve Bank has kept the repo rate unchanged at 5% per annum, it said on Thursday. Briefing reporters following the Monetary Policy Committee (MPC) meeting, Reserve Bank Governor Gill Marcus said that although the sustained breach of the bank\u2019s inflation target range was not central to forecast, upside risks to the inflation outlook required […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[1289,5],"class_list":{"0":"post-22708","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-mype","8":"tag-port-elizabeth-2","9":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/22708","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=22708"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/22708\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=22708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=22708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=22708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}