Consumers have been given some reprieve by the South African Reserve Bank (SARB) following a unanimous decision by the monetary policy committee (MPC) to keep the repo rate unchanged.
The MPC voted to hold the repo rate at 8.25% for a third consecutive time, while the prime lending rate sits at 11.75%.
Although high, this means the interest rates that consumers will pay on their credit will remain unchanged for now.
Despite the reprieve, the central bank maintained a hawkish tone in its final announcement on policy rates on Thursday afternoon.
As monetary policy continues to focus on achieving inflation targets, the reserve bank said it was juggling volatile global conditions and modest economic growth.
On the domestic front, the central bank’s governor, Lesetja Kganyago, said constraints in the energy and logistics sectors were still binding on economic activity.
“A sustained reduction in load shedding or greater energy supply from alternative sources would significantly increase growth. The operation of ports and rail, however, have become a serious constraint.”
Elevated food and transport costs have kept the consumer price inflation elevated, reaching a five-month high of 5.9% in October.
Kganyago warned that extended risks to inflation threatened to keep borrowing costs higher for longer.
“If you want to know where interest rates are going, look at where inflation is going. The lower the inflation, the lower the interest rates you would have.”
The MPC’s next meeting is at the start of next year, as it continues to watch inflation trends.