South African Reserve Bank leaves its repurchase rate unchanged at 7%

By Richard Connell

New York, Sept. 22 - The Monetary Policy Committee of the South African Reserve Bank kept its repurchase interest rate at 7% at its meeting on Tuesday, according to a news release issued by the bank.

The committee noted that there are signs that a global economic recovery is underway but warned that the pace of the recovery was likely to be slow and uneven.

The committee also pointed out that domestic economic growth in South Africa, which has been negative in each of the past three quarters, is expected to improve in the coming quarters.

Inflation as measured by the CPI declined to 6.4% in August from 6.7% in July, the result of lower prices in housing, utilities and food.

Forecasting that inflation is likely to return to the inflation target by the second quarter of 2010, and remain within the target range of 3% to 6% for all of 2011, the committee opted to leave the interest rate unchanged at 7%.

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