By CentralBankNews.info
South Africa’s central bank held its benchmark repurchase rate steady at 5.0 percent, as expected, and said that “given the increased upside risks to the outlook, we do not see room for further monetary accommodation.”
The South African Reserve Bank (SARB), which has held its rate steady since July 2012, said the outlook for domestic growth remained fragile, with low business and consumer confidence and third quarter activity was expected to have been adversely affected by protracted work stoppages in the motor vehicle sector and this contributed to a decline in exports.
But the upside risks to inflation and a possible further deprecation of the South African Rand from a reduction in the U.S. Federal Reserve’s asset purchases outweighs this weak outlook for growth.
“The upside risks to the inflation outlook remain elevated, dominated by uncertainties primarily relating to both the timing and the speed of the tapering of the US Fed’s bond purchasing program me,” said Gill Marcus, SARB governor.