SA Reserve Bank again opted to leave the Repo rate unchanged at 5.5%

The SA Reserve Bank opted to leave the Repo rate unchanged yesterday at 5.50%.

In making the decision to leave rates unchanged, the following considerations are worth noting:

• Rand volatility is a moderate but rising risk to the inflation outlook.
• The inflation forecast of the Bank is more or less unchanged since the previous meeting of the MPC and inflation is mostly expected to remain within the inflation target range.
• They have revised down growth forecasts for GDP from 3.7 to 3.2 in 2011 and from 3.9 to 3.6 for 2012.
• There are concerns about the balance between inflation targeting and supporting growth.
• During the press briefing after the speech, Marcus noted that a rate cut had been a significant part of the MPC discussions.