Reserves Bank of South Africa slashes repo rate
The South African Reserve bank declared its decision to minimize the repo rate by almost 25 basis points to around 6.25 %. The decline of repo rate observed as a surprise as analysts anticipated the bank to maintain it unchanged. The last cut was announced in July 2019. The governor of the Reserve bank of South Africa, Lesetja Kganyago said that specific measures were needed to review growth and expenditures.
He stated that the development of well-judged macroeconomic policies and structural regenerates that lesser costs and gain investment, expected growth and job generation remains urgent. The governor told that growth anticipated for the last year was 0.4 %, low from the last estimation of 0.5%.
The predictions for 2020 and the next year have also reduced to 1.2 % and 1.6 %, respectively, because of the downturn growth than lastly projected in Q3 and Q4. The GDP predict for 2022 is nearly 1.9 %, he further added. Labor federation Congress of South African Trade Unions stated that along with millions of grateful customers, the African Reserve bank must diminish interest rates in the upcoming three quarterly discussions.
Reportedly, this will offer some comfort to consumers who are facing the cost of living. Hopefully, this will also create it easier for small-term businesses to enlarge and with any possibility that stimulate economic growth. The head of the school of economic & business sciences at the University of the Witwatersrand, Professor, Jannie Rossouw said that he had anticipated the rate reduction as the inflation was in line.