Economics Editor
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In a move that brought some relief to indebted consumers, the South African Reserve Bank unexpectedly kept its benchmark interest rate unchanged on Thursday despite soaring inflation, saying the policy stance is appropriate for now after the hike it implemented in May.
Economists, households and businesses had been bracing for another 25 basis point hike in the policy rate in July, more so after data from Stats SA on Wednesday showed consumer inflation soared to a two-year high of 5% in June mainly due to transport costs, pulling further away from the top end of the 2%-4% tolerance range of the Bank’s 3% target.
“The inflation outlook has improved slightly since our last meeting, but inflation is still too high, while growth is weak,” Bank governor Lesetja Kganyago told a media conference after its monetary policy committee (MPC) concluded the fourth of six meetings it holds annually.
