The South African Reserve Bank (SARB) has kept the repo rate at 7.5% following the Monetary Policy Committee (MPC) meeting on Thursday. Four MPC members according to the Governor preferred a hold. The other two members favoured a rate cut of 25 basis point. The commercial banks’s prime interest will remain at 11% as a result of this decision.

Amongst the key reasons for this decision is the macro-enviromental factors. Kganyago made this assertion as he pointed out at the rapidly shifting geopolitical relationships and trade tensions are putting the economy at risk.

It must be noted that this is the first time the committee decided to pause the rate cut after having implemented three rate cuts. In his announcement, Kganyago said that while the inflation is still in the bottom half of the of the SARB’s target range, it has edged higher over the past few months.

“We continue to see low inflation for goods, which is likely to be temporary,” he said. Focusing on the discussion on inflation ,Kganyago said there are more moving parts than usual, including a re-weighting of the Consumer Price Index by Statistics South Africa.