by: Michele Vollaro | March 29, 2024
South Africa’s Central Bank kept its key interest rate unchanged at 8.25% at its latest meeting on Wednesday, March 27, saying that overall, risks to the inflation outlook are tilted to the upside. It was the fifth consecutive meeting in which the bank kept its reference rate at the same level.
The decision to keep the reference rate at its current level was unanimous.
Inflation rose to 5.6% year-on-year in February from 5.3% in January, nearing the upper limit of the central bank’s target of 3%-6%.
This decision underlines the caution of the Central Bank of South Africa in managing the delicate balance between supporting economic growth and controlling inflationary pressures. Stable interest rates reflect a measured approach in the face of global uncertainty and domestic economic challenges, including inflation approaching the upper bound of the target.
Keeping the reference rate unchanged aims to provide some stability to investors and consumers, in a context of growing concern about rising prices and its impact on household purchasing power. The Central Bank continues to closely monitor economic and financial developments, both locally and internationally, to ensure that monetary policy remains aligned with the country’s inflation and growth objectives.
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