SEIFSA Welcomes Reserve Bank’s Decision To Leave Interest Rates Unchanged

Johannesburg, 17 January 2019 – The Steel and Engineering industries Federation of Southern Africa (SEIFSA) welcomes the South African Reserve Bank’s (SARB’s) decision to keep the repo rate unchanged at 6.75% and the prime rate at 10.25%, as it will further stimulate domestic demand and sustain the recent increase in real Gross Domestic Product (GDP) growth, SEIFSA Chief Economist Michael Ade said this afternoon.

The decision to keep rates unchanged comes against the backdrop of 2.2 % quarter-on-quarter increase in the real GDP during the third quarter of 2018, up from -0.4% during the second quarter of 2018.

“The announcement augurs well for businesses facing an increasingly constrained consumer demand, thereby invariably impacting negatively on their margins. Moreover, stability in interest rates not only provide some level of certainty to businesses, but also plays an imperative role toward reducing the cost of borrowing,” Dr Ade said.

SEIFSA is a National Federation representing 23 independent employer
Associations in the metals and engineering industries, with a combined membership of 1600 companies employing around 200 000 employees. The Federation was formed in 1943 and its member companies range from giant steel-making companies to micro-enterprises employing fewer than 50 people.

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