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The South African Reserve Bank (SARB) has increased the repurchase rate from 6.50% to 6.75% at the conclusion of the Monetary Policy Committee (MPC) meeting on Thursday. The SARB has substantiated its decision by saying that lending rates in South Africa still remain accommodative. Further rate decisions will continue to be data dependent.
The decision comes despite a downward revision in the outlook for GDP growth and headline inflation. In 2018, economic growth is now expected to be realized at 0.6% (previously estimated at 0.7%) while headline inflation for the year is expected to average at 4.7% (previously estimated to average at 4.8%).
The Rand (USD/ZAR) – Technical View