The Reserve Bank expects domestic inflation to be contained at about 4.5% over the next two years in the absence of any shocks, governor Lesetja Kganyago said Wednesday in comments that might cement market forecasts of local interest rates remaining at historic lows.

Inflation expectations appeared well anchored around the midpoint of the central bank’s 3%-6% inflation target range and the picture looked “promising”, Kganyago said. In the wake of the Covid-19 pandemic and lockdown restrictions imposed in 2020, the Bank responded by cutting the repo rate by 275 basis points to the current 3.5%, the benchmark rate’s lowest level in about five decades, as it sought to support an economy that shrank by 7% in 2020 — the worst performance in about a century. ..

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as articles from our international business news partners; ProfileData financial data; and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now