“The MPC has decided to keep the repurchase rate unchanged at 5.0 percent per annum at this stage,” said Marcus at the last Monetary Policy Committee (MPC) meeting of 2013.
The repo rate (which is the scale at which the Reserve Bank lends money to commercial banks) has remained unchanged at 5% since July 2012.
Market expectation was for the central bank to keep the repo rate unchanged.
“We expect the MPC to retain its hawkish tone, emphasising the inflationary risks of a weak exchange rate more than the tepid growth outlook,” said Absa in a research note on Wednesday.
The MPC noted that since its last meeting, the headline inflation rate has returned to within the bank’s inflation target range of between 3 and 6%.
“Despite this favourable development, inflation is expected to remain uncomfortably close to the upper end of the target band,” said Marcus.
In October, the Consumer Price Index (CPI) slowed to 5.5% year-on-year down from the 6% recorded in September.
The bank’s inflation forecast was more or less unchanged since its last meeting with the forecast average inflation rates for 2013 and 2014 at 5.8% and 5.7% respectively.