Reserve Bank leaves repo rate unchanged on better inflation expectations
The Reserve Bank left interest rates unchanged on Thursday, at its second meeting of 2017, which took place amid heightened political turmoil. At the January meeting, the Bank signalled that it could begin raising rates again if higher oil prices or a weaker rand caused inflation to remain outside the Bank’s 3%-6% target range. Consumer inflation as measured by the consumer price index (CPI) spent most of last year above 6%, and the most recent reading, for February, showed CPI inflation slowing to 6.3% from 6.6% in January, with food inflation down to 9.9% after being in double digits since April last year. Food inflation is expected to continue falling as a severe drought abates in many areas of SA. Farmers are anticipating the second-biggest maize crop on record and a resumption of exports.
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