The SA Reserve Bank’s monetary policy committee left the benchmark interest rate unchanged at 3.5% on Thursday, even as it revised down its forecasts for growth in an economy still navigating its way through the fallout from the coronavirus shock.
But there were distinct risks that the Bank may delay any moves to get a better sense of the effect previous rates cuts are having and to assess the outcome of the upcoming medium-term budget policy statement in October, according to economists. The revisions came in the wake of a dire GDP print from Stats SA last week that revealed a 51% quarter-on-quarter, seasonally adjusted and annualised contraction, during the worst of SA’s hard lockdown. If the second-quarter results are not annualised, GDP contracted 16.4% quarter on quarter.