Yesterday, as expected, the Reserve Bank’s monetary policy committee (MPC) kept interest rates unchanged at 6.75%. According to a TimesLIVE report, all 22 economists polled by Bloomberg expected the repo rate to remain unchanged despite lower inflation and a weaker economic outlook – with expectations that the economy contracted in the first quarter of the year. The Bank adopted a more dovish stance in their statement, indicating that there may room for interest rate cuts this year. ‘Average inflation expectations have been declining slowly since the end of 2017,’ Bank governor Lesetja Kganyago said. Inflation is expected to moderate this year and the Bank has made it clear it would prefer inflation anchored at the mid-point of its 3%-6% inflation target range. In April, inflation was below the mid-point of the target range at 4.4%. ‘Recent monthly inflation outcomes have remained around the mid-point of the inflation target range, in part due to weak demand and positive inflation surprises. The medium-term inflation outlook has moderated slightly,’ Kganyago said.