No Hike in the Benchmark Interest Rate…For Now

SOUTH AFRICA - Report 22 May 2014 by Iraj Abedian
The South African Reserve Bank (SARB)’s Monetary Policy Committee (MPC) has opted to leave the repo rate at 5.5% per year (see Graph 1). The Bank cited a challenging environment characterized by a weak domestic economy coupled with elevated price pressures as factors that informed its stance. Graph 1: Headline and Core Annual Inflation Rates and Repo Rate, South Africa Source: SARB, Stats SA and PAIRS As shown in Graph 1, headline inflation reached 6.1% year on year in April 2014, a rate in breach of the upper limit of the SARB’s 3-6% inflation target range. On the other hand, recent prints...

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