Publications
Partners
The South African Reserve Bank cut its benchmark interest rate for the first time since July as inflation is forecast to remain within the target and the economy is barely growing.
The Monetary Policy Committee unanimously voted to lower the repo rate to 6.25% from 6.5%, Governor Lesetja Kganyago told reporters on Thursday in Pretoria.
Of the 19 economists surveyed by Bloomberg, only three predicted the move.
The prime rate will also fall to 9.75%.
Kganyago said electricity supply constraints would keep economic activity muted, while business confidence remained weak.
The central bank also re-evaluated South Africa’s GDP estimating that for 2019 it will only expand by 0.4% while the oulook for 2020 and 2021 were downgrded to 1.2% (from 1.4%) and 1.6% (from 1.7%) respectively.
Kganyago also said that the “implementation of prudent macroeconomic policies and structural reforms that lower costs and increase investment, potential growth and job creation, remains urgent.”
- Bloomberg, Fin24
