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HIGHLIGHTS-South African central bank comments on rate decision
March 30, 2017 / 1:17 PM / 6 months ago

HIGHLIGHTS-South African central bank comments on rate decision

PRETORIA, March 30 (Reuters) - Below are comments from South African Reserve Bank Governor Lesetja Kganyago on Thursday as he announced the central bank’s latest decision on its benchmark repo rate.

RAND “While most measures of emerging market risk have narrowed over recent months, those for South Africa have widened again over the past few days. The rand has also been underpinned by favourable terms of trade trends.”

GROWTH “The domestic growth outlook remains weak following the negative growth recorded in the fourth quarter of 2016.”

“Low growth in gross fixed capital formation remains a downside risk to growth in the short term.”

INFLATION

“Overall the MPC accesses the risk to inflation outlook to be moderately on the upside mainly due to the high degree of exchange rate uncertainty.”

“Since the previous MPC meeting the inflation outlook has improved. However, the risk to the inflation forecast has been affected by the reaction of the of the exchange rate to the current elevated levels of political uncertainty.”

DECISION

“The MPC is concerned that increased political uncertainty could impact negatively on private sector investment and household consumption expenditure, and further undermine employment growth. The risks to the growth outlook are therefore assessed to be on the downside.” (Reporting by TJ Strydom and Olivia Kumwenda-Mtambo; Editing by James Macharia)

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