South Africa's central bank leaves repo rate steady at 5.75 pct

South Africa Reserve Bank governor (SARB) Lesetja Kganyago gestures during a media briefing in Pretoria, October 6, 2014. REUTERS/Siphiwe Sibeko·Reuters· (Reuters)

PRETORIA (Reuters) - South Africa's Reserve Bank left interest rates unchanged at 5.75 percent as expected on Thursday, balancing concerns about a deterioration in the inflation outlook with those over weak economic growth. The bank has kept its benchmark rate at 5.75 percent since July last year, as Africa's most advanced economy struggles to grow due to structural constraints, including power shortages as state utility Eskom fails to cope with demand. "The growth outlook remains constrained by electricity supply concerns and low business confidence, and the risks to the growth forecast are assessed to be moderately on the downside," central bank Governor Lesetja Kganyago told a news conference. On the other hand, the near-term inflation outlook had deteriorated with the partial reversal of recent fuel price declines, meaning the scope to pause on policy tightening had narrowed. "However, given the uncertainties related to U.S. policy normalisation and the weak state of the domestic economy, the MPC has unanimously decided to keep the repurchase rate unchanged for now," Kganyago said after the bank's monetary policy committee concluded a three-day meeting. "The timing of future interest rate increases will be dependent, as before, on a range of domestic and external factors."

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