South Africa‘s central bank kept its benchmark repo rate unchanged at 6.75% on Thursday in a unanimous decision, saying the risks to the inflation outlook were “more or less evenly balanced”.
The bank said at its last meeting in January that the risks to inflation, one of the main indicators it targets, were moderately on the upside.
The change in rhetoric reflects modest price increases in the past two months, of around 4%. That is well within the South African Reserve Bank’s 3% to 6% target range.
All economists surveyed by Reuters predicted the repo rate would remain on hold on Thursday.
Reserve Bank Governor Lesetja Kganyago said risks to economic growth continued to be on the downside.
“Electricity supply constraints and weak business confidence will likely limit near-term production and investment prospects,” Kganyago told a news conference.
Economic output in Africa‘s most industrialised economy expanded just 0.8% last year, well below the level hoped for by President Cyril Ramaphosa, who is trying to revive investor interest in South Africa after a decade of slow growth.
The Reserve Bank on Thursday cut its growth forecast for 2019 to 1.3% from a 1.7% prediction in January. It kept its 4.8% inflation forecast for this year intact.