The South African Reserve Bank (SARB) decided to keep the benchmark interest rate at 8.25% at the Monetary Policy Committee meeting held on the 27th (local time). With this, South Africa has kept the benchmark interest rate unchanged for five consecutive times since July last year.
Lesetja Kganyago, Governor of SARB, stated, "It is welcome that inflation expectations have eased," but added, "The major advanced economies' interest rates have remained high for a long time, causing the rand to trade weaker than expected."
He also added, "It is expected that central banks of major countries around the world will cut interest rates at a slower pace and at a later time."
Governor Kganyago further explained that the South African economy underperformed expectations, growing only 0.1% in the fourth quarter of last year, resulting in an overall growth rate of 0.6% for 2023.
He cited power shortages and disruptions in port and rail logistics as the main causes of the poor performance, then forecasted, "As these supply-side constraints ease, a moderate growth trend is expected from this year."
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