Reserve Bank Holds Interest Rate At 7.5

The South African Reserve Bank held interest rates at 7.5, citing global economic uncertainty and upside risks to inflation, governor Lesetja Kganyago announced on Thursday.

The widely expected decision was split between the committee members, with two members favouring a 25 basis point cut, and four preferring the decision to hold.

The prime interest rate stays at 11.

For several quarters we have enjoyed rising confidence in South Africa, with a smaller country risk premium and lower bond yields. However, the global economy is not on a stable footing and there are also domestic uncertainties, which put these favourable trends at risk. This calls for a cautious policy approach, said Kganyago.

Trade tensions, shifts in longstanding geopolitical relationships and elevated inflation in advanced countries including the United States, Euro members and the United Kingdom were flagged as concerns.