Zuko Komisa
On Thursday the South African Reserve Bank cut the repo rate by 25 basis points to 8%. The drop means the prime lending rate will also drop to 11.50%.
Lesetja Kganyago, the governor of the SARB, stated that the bank’s projections call for further progress in inflation when he announced the reduction in the repo rate on Thursday.
“In discussing the stance, MPC members considered an unchanged stance, a 25-basis point cut, and a 50-basis point cut. The MPC ultimately reached consensus on 25 basis points, agreeing that a less restrictive stance was consistent with sustainably lower inflation over the medium term.
In the near term, we continue to see a dip in headline inflation, supported by the stronger exchange rate and lower oil prices. The implied starting point of the rand is R18.04 to the US dollar, an appreciation of nearly 2% relative to our July assumption.
“This contributes to fuel price deflation, which helps keep headline inflation below 4% through the first half of next year. As usual, we will look through this near-term supply shock, focusing on the medium-term outlook,” said Kganyago
The MPC decided to reduce the policy rate by 25 basis points, to 8% per annum, with effect from 20 September. The decision was unanimous. #SARBMPCSEP24 Here is a summary: pic.twitter.com/a8OrMVolMJ
— SA Reserve Bank (@SAReserveBank) September 19, 2024
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