South African Reserve Bank Maintains Main Repo Rate at 8.25%

By Alexandra Wexler

JOHANNESBURG--The South African Reserve Bank on Thursday maintained its main repo rate at 8.25% in an effort to keep inflation in check amid general uncertainty at home and abroad.

The SARB kept the rate on hold for the sixth consecutive meeting.

The bank announced its decision a day after South Africans took to the polls in what is projected to be a historical rebuke for the ruling African National Congress, which is expected to lose its absolute majority for the first time since the end of apartheid.

"Uncertainty is unusually elevated at the moment," said SARB Governor Lesetja Kganyago.

Near-constant breakdowns of South Africa's aging coal power plants and a lack of money to buy diesel for emergency generators have led to rolling nationwide blackouts of up to half a day, hampering economic growth. But there have been no scheduled power cuts since March 26, which Kganyago called "a welcome development."

Kganyago said the blackouts shaved 1.5 percentage points off of GDP in 2023, and would take 0.5 percentage points off of GDP this year, down from an estimate of 0.6 percentage points in March.

Analysts say the blackouts are likely to resume after the elections as maintenance resumes and the government taps back on its diesel expenditure.

In 2024, the SARB expects growth of 1.2%, unchanged from the bank's March estimate.

Write to Alexandra Wexler at [e-mail]

(END) Dow Jones Newswires

05-30-24 0955ET