The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) has made the decision to ultimately lower interest rates.
The repo rate will drop from 8.25% to 8% after being lowered by 25 basis points (bps).
As a result, the prime lending rate will decrease to 11.50% from 11.75%.
Prior to this MPC decrease, the repo rate was at a a 14-year high.
The Reserve Bank Governor, Lesetja Kganyago, stated that when considering the stance, MPC members discussed an unchanged stance, a 25bps cut, and a 50bps cut.
Regarding inflation, Kganyago stated that South Africa’s headline rate fell to 4.4% in August. Which is a 3-year low and near the centre of their target range.
The Governor also said that South Africa’s economic growth output was slightly lower than expected in the first half of the year.
“We expect improvements in the second half, with growth of 0.6% in both quarters. This reflects rising confidence, in part due to a stable electricity supply.”
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