adminThe SA Reserve Bank’s monetary policy committee cut the repo rate by 100 basis points, or one percentage point, from 6,25 percent to 5,25 percent yesterday.
Most economists were expecting a cut of 50 basis points.
The Reserve Bank is under pressure to help arrest the economy’s downward spiral.
South Africa is already in recession, and the fall-out from business disruption due to the coronavirus crisis will be significant.
At least one analyst expects that the economy could shrink by more than 2 percent this year.
A rate cut could hurt the rand — lower interest dents its investment appeal — but SARB governor Lesetja Kganyago said the steep cuts in interest rate cuts in other economies have created space for the bank to address the rapidly deteriorating state of the South African economy.
On Sunday, the US central bank cut its rates to close to 0 percent.
Other banks have followed. – Reuters.
Online Reporter