South Africa holds rate at 7%, expects mild Brexit effect in near term

By Wendy Van Sickle

Columbus, Ohio, July 21 – South African Reserve Bank’s Monetary Policy Committee has unanimously decided to maintain the repurchase rate at 7%.

The bank is concerned about the lack of clarity going forward from the United Kingdom’s decision to leave the European Union and said there has been spillover into South African financial markets, particularly the exchange rate. However, it expects the direct short-term impact on domestic growth and trade to be fairly limited, according to a bank announcement.

The consumer price index for all urban areas moderated at 6.1% in May, then rose to 6.3% in June. It was record at 6.2% in April and 6.3% in March, after topping out at 7% in February.

The bank’s measure of core inflation, which excludes food, fuel and electricity, was 5.6% in June, up from 5.5% in April.

The bank said it “remains ready to react appropriately to any significant change in the inflation outlook.”

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