South African Reserve Bank Holds Policy Rate Steady At 8.25%

(RTTNews) - South Africa's central bank maintained its policy rate unchanged on Thursday as the majority of the policy board observed that the current policy stance remains appropriate to stabilize inflation at the target range of 4.5 percent.

The Monetary Policy Committee decided to keep the repurchase rate at 8.25 percent, the South African Reserve Bank said in a statement. The decision was in line with economists' expectations.

Four policymakers voted for an increase, while two, who preferred a reduction of 25 basis points, were of the view that the inflation outlook had improved enough to reduce the degree of restrictiveness.

"The forecast continues to see rates easing into more neutral territory by next year," SARB Governor Lesetja Kganyago said.

Recent official data showed that the country's consumer price inflation held steady at 5.2 percent in June and was still in the top half of the bank's target range.

Looking ahead, inflation for this year is now projected at 4.9 percent, down from the 5.1 percent estimated previously.

The bank expects inflation to slow below 4.5 percent over the next few quarters on the back of lower fuel and food prices amid hopes of a stronger rand.

"We are committed to stabilizing inflation at the mid-point of the target band," Kganyago said.

"Achieving this outcome will improve the economic outlook and reduce borrowing costs."