The Reserve Bank has decided not to lower the interest rate.
Lesetja Kganyago, president of the Reserve Bank, made the announcement on Thursday afternoon.
Three members of the Monetary Policy Committee (MPC) were in favor of leaving the rate unchanged, while two were in favor of a reduction of 25 basis points.
Kganyago said in its online news conference that the impact of the Covid-19 pandemic on the economy is significant.
The Reserve Bank’s expectation for economic growth is now -8.2% compared to the -7.3% forecast in July, the -7% in May, the -6.1% in April and only -0.2% average March.
Due to the sharper contraction in 2020, stronger growth is forecast over the next two years. For 2021, growth of 3.9% is now forecast (July: 3.8%), and for 2022, 2.6% is forecast (July: 2.9%).
The central bank lowered its expectation for inflation to 3.3%. This is compared to the 3.4% previously predicted.