No rate relief from Marcus

PRETORIA – South Africa’s central bank left its repo rate steady at seven per cent yesterday, as expected, on signs the economy is on course to exit recession and on worries that high power price rises will feed price pressures.

Under new Governor Gill Marcus, the central bank’s monetary policy committee kept the cautionary stance it had adopted under previous Governor Tito Mboweni, leaving the repo rate steady for the third meeting in a row.The South African Reserve Bank (SARB) reduced interest rates by 500 basis points between December last year and August to help stimulate an economy in its first recession in 17 years.Manufacturing output figures and new car sales numbers have indicated the worst of the recession may be over and a recovery is underway, although it is expected to be slow.Twenty-four of the 28 economists polled by Reuters saw the central bank leaving the repo rate unchanged, while four forecast a 50 basis point cut for the repo rate to 6,5 per cent.Some analysts had suggested the committee may cut again after an alliance of the ruling party and its left wing allies called on Sunday for a broader monetary policy mandate taking into account growth and job creation.- Nampa-Reuters