S.Africa rates held at 5.0 pct, risks to inflation

PRETORIA (Reuters) - South Africa's Reserve Bank left its benchmark repo rate unchanged as expected on Thursday, balancing weakening economic growth against a deterioration in the inflation outlook due to a sharply weaker rand currency.

All 22 economists polled by Reuters last week said the Reserve Bank's Monetary Policy Committee would leave rates unchanged at 40-year lows. Nearly half of those polled predicted the next move in late 2013 or the beginning of 2014.

The central bank has left rates unchanged at all its policy meetings this year except for July, when it decided on a surprise cut of 50 basis points to 5.0 percent.

Governor Gill Marcus said the bank's inflation outlook for 2013 had deteriorated and was now expected to average 5.6 percent in the final quarter of 2012 from the 5.3 percent seen earlier.

This was partly due to the rand, which has become sensitive to domestic economic and political news, as well as the external global risk perception that drove the currency's value for the first half of the year.

"The rand is expected to remain volatile and subject to overshooting and its depreciation poses an upside risk to inflation outlook," she told a news conference.

Source: http://news.yahoo.com/africas-cbank-leaves-repo-rate-steady-5-0-132744165--sector.html

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