Interest rate remains unchanged
Richard Mantu
11 February 2005
Reserve Bank Governor Tito Mboweni has opted to leave South Africa's repo rate unchanged at 7.5%, citing the presence of "many uncertainties" in the market.
The repo rate is the rate at which the central bank lends money to commercial banks. With the repo rate at 7.5%, the interest rate remains at its current 11%.
Addressing the media on Thursday after the Monetary Policy Committee (MPC) meeting in Pretoria over the past two days, Mboweni said the committee would continue to monitor the developments in economy and factors affecting inflation.
Mboweni said the Bank's forecast indicated that inflation might rise moderately during 2005, but would remain within the Bank's target range of of 3-6 percent over the next two years. He said the Bank would focus on maintaining inflation within this range.
The consumer price index excluding mortgage rate (CPIX), used as a measure for inflation, is currently at 4.3%.
Mboweni said
that CPIX inflation could rise moderately during 2005 to a little above the midpoint of the range (5%) and then ease somewhat during the rest of the forecast period.
Mboweni said the central bank would also monitor the exchange rate, adding that it was important to keep the rand competitive to ensure a stable exchange rate that was "beneficial for the South African economy".
"We don't want a currency that brings major imbalances in the economy", Mboweni said.
Source: BuaNews
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