Answer to Question #62474 in Finance for Cleopatra

Question

Given the South African economic climate, what should the MPC committee do to the REPO rate? Substantiate your opinion?

Answer 1

Given the South African economic climate, the South African Reserve Bank kept its benchmark repo rate unchanged at 7 percent in September of 2016 as widely expected. Policymakers said the inflation outlook has improved as earlier return to target range is seen, although growth remains subdued due to weak domestic fixed investment and low levels of business and consumer confidence. As a result, the improvement seen in the second quarter is unlikely to be sustained.