Rand plunges 2.5% against US dollar as SARB keeps repo rate unchanged
The rand has lost 2.5% against the greenback after the South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) kept the repo rate unchanged at 7%.
This means the prime lending rate will remain at 10.5%.
The fallout from the Middle East conflict has also contributed to global inflation.
The central bank highlighted risks to growth from weaker consumer and business confidence, and attributed the bulk of the inflation overshoot to rising fuel costs.
It is currently trading at R 16. 81 cents to the dollar.
SARB Governor Lesetja Kganyago says the committee will continue to monitor the global economic outlook.
Kganyago says, “The committee decided to keep the policy rate unchanged at 7%. Four members preferred a hold, while two favoured an increase of 25 basis points. The committee agreed that the outlook is uncertain, and with the rate increase at our previous meeting, the policy stance is appropriate for now with rates somewhat restrictive.”
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-Reporting by Sharlene Botha and Nothando Magudulela.