The South African Bank’s (SARB) decision has been welcomed by the metals and engineering sector to keep the repo rate unchanged at 6.75%.
The Steel and Engineering Industries Federation of Southern Africa (Seifsa) said increasing operational expenses, low domestic demand, and the weaker exchange rate had, among other factors, would have a great impact in the sector, and a stable interest rate would provide a reasonable degree of certainty.
“The generally weaker exchange rate, increasing logistics costs and rising input costs compound the cost of doing business locally,” Seifsa Chief Economist Michael Ade said.
The repo rate is not the only one that remained the same, the prime lending rate also remained at 10.25%.
Chief Economist said that there are external trading factors that also added more pressure such as “constricted global growth expectations due to trade war risks.”
This decision has also been applauded by the Black Business Council, who noted that the first quarter of the year had been particularly taxing on the pockets of consumers, with three consecutive fuel hikes and higher electricity tariffs.
“The unchanged repo rate will give government alongside business, labor, and community the necessary window to implement mitigating reforms to address our slow-growing economy,” said Sandile Zungu, the council’s president.