Friday, May 13, 2011

South African Central Bank Holds Rate at 5.50%

The South African Reserve Bank maintained the repo rate unchanged at 5.50% despite a rise in "cost-push" inflation.  The Bank said: "...the inflation outlook has deteriorated further, mainly as a result of external cost-push factors.  Underlying demand conditions remain relatively restrained, and are not seen to pose a significant risk to the inflation outlook at this stage. However there are elevated risks that these external price shocks could ultimately feed through to more generalised inflation."  South Africa reported inflation of 4.1% in March, up from 3.7% in February this year, with core inflation at 3.4%.


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