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South African central bank leaves repo rate unchanged at 3.50%

Credit: REUTERS/THOMAS WHITE

South Africa's central bank left its main lending rate unchanged at 3.50% on Thursday, Governor Lesetja Kganyago announced, saying risks to the inflation outlook were balanced.

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JOHANNESBURG, Sept 17 (Reuters) - South Africa's central bank left its main lending rate unchanged at 3.50% on Thursday, Governor Lesetja Kganyago announced, saying risks to the inflation outlook were balanced.

The decision follows 300 bps of rate cuts since the beginning of 2020 to support an economy that was in recession before COVID-19 hit.

Three members of the bank's five-member monetary policy committee (MPC) favoured to keep rates on hold, while two voted for a 25 basis points cut, a split reflected in analysts' forecasts.

In a Reuters poll published last week 15 economists predicted the repo rate would remain unchanged, while 10 predicted a 25 basis point cut.

Kganyago said risks to the growth outlook are also assessed to be balanced, "but this is tentative and open".

The Reserve Bank further cut its economic forecast to a contraction of 8.2% for 2020 from its July forecast of a 7.3% contraction.

(Reporting by Mfuneko Toyana; Editing by Olivia Kumwenda-Mtambo)

((mfuneko.toyana@thomsonreuters.com; +27117753153; Reuters Messaging: mfuneko.toyana.thomsonreuters.com@reuters.net))

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