EXCERPTS-South African central bank governor's comments on rate decision
JOHANNESBURG, May 19 (Reuters) - Below are some quotes from
South African Reserve Bank Governor Lesetja Kganyago on Thursday
as he announced the central bank's decision to raise benchmark
repo rate by 50 basis points to 4.75%.
INFLATION
"As a result of higher global food prices, local food price
inflation is also revised up and is now expected to be 6.6% in
2022 (up from 6.1%), and 5.6% in 2023 (up from 5.1%). Food price
inflation is forecast to ease to 4.2% in 2024 (down from 4.4%)."
"The Bank's forecast of headline inflation for this year is
revised higher to 5.9% (from 5.8%), primarily due to the higher
food and fuel prices."
"Core inflation is forecast lower at 3.9% in 2022 (down from
4.2%) due to lower services price inflation."
ECONOMIC GROWTH
"The economy is expected to grow by 1.7% in 2022, revised
down from 2.0% at the time of the March meeting. This is due to
a combination of short-term factors, including the flooding in
Kwa-Zulu Natal and the continued electricity supply
constraints."
"The economy is forecast to expand by 1.9% in both 2023 and
2024. At these rates, growth remains well above a low rate of
potential, impacted by loadshedding, infrastructure and policy
constraints."
"Overall, and after revisions, the risks to the medium-term
domestic growth outlook are assessed to be balanced."
DECISION
"Against this backdrop, the MPC decided to increase the
repurchase rate by 50 basis points to 4.75% per year, with
effect from the 20 of May 2022. Four members of the Committee
preferred the announced increase and one member preferred a 25
basis point rise in the repo rate."
"The implied policy rate path of the QPM, given the
inflation forecast, indicates gradual normalisation through to
2024. As usual, the repo rate projection from the QPM remains a
broad policy guide, changing from meeting to meeting in response
to new data and risks."
(Reporting by Olivia Kumwenda-Mtambo, Alexander Winning and
Promit Mukherjee; Editing by James Macharia Chege)
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