May 21, 2020 / 1:39 PM / 10 days ago

HIGHLIGHTS-South African central bank comments on rate decision

JOHANNESBURG, May 21 (Reuters) - Below are comments from South African Reserve Bank (SARB) Governor Lesetja Kganyago on Thursday as he announced the central bank’s latest decision on its benchmark repo rate, a 50- basis-point cut.


“The overall risks to the inflation outlook at this time appear to be to the downside, but less clearly so compared to conditions in March and April”

“Expectations of future inflation continued to soften but broadly remain around the mid-point of the band. Market-based expectations for short and medium-term inflation have fallen, while long-term inflation expectations remain higher”


“The Bank currently expects GDP (gross domestic product) in 2020 to contract by 7.0%, compared to the 6.1% contraction forecast in April”

“Even as the lockdown is relaxed in coming months, for the year as a whole, investment, exports and imports are expected to decline sharply. Job losses are also expected to be widespread”


“The rand has depreciated by 22.9% against the U.S. dollar since January and by 0.7% since the April meeting of the MPC (Monetary Policy Committee)”


“The MPC decided to cut the repo rate by 50 basis points, taking it to 3.75% per annum, with effect from 22 May 2020. Three members preferred a cut of 50 basis points and two preferred a cut of 25 basis points”. (Reporting by Olivia Kumwenda-Mtambo, Mfuneko Toyana and Alexander Winning; editing by Larry King)

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