SA Reserve Bank leaves rates unchanged ...

The South African Reserve Bank left interest rates unchanged at the end of its three-day meeting yesterday, a decision that was widely expected.

This leaves the repo rate at 6.5%. The last move on rates was a cut of 25 basis points in March.

Inflation has been rising – with June’s consumer inflation rate of 4.6% the highest of the year so far – and inflationary pressures seem set to persist.

“Developments in the international environment have placed upward pressure on the inflation trajectory, while the domestic growth outlook remains challenging,” Reserve Bank governor Lesetja Kganyago said at the announcement of the decision.

Fuel prices have been a major driver of local inflation, with international oil prices having risen more than 8% this year.

This has been compounded by a weaker rand and the prospect of an all-out global trade war, which has created an uncertain outlook for emerging-market currencies.

Most economists feel that inflation nonetheless remained in check, well within the Bank’s target range of 3% to 6%, and that a moribund economy would persuade the Bank’s monetary policy committee to hold fire.

“Despite remaining within the target band, the Bank’s model projects an increase in headline inflation,” one said.

But 2018 GDP rise slashed to 4.8% from 4.9% amid inflation pressures