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Reserve Bank Governor Lesetja Kganyago.
Reserve Bank Governor, Lesetja Kganyago, says the Monetary Policy Committee has decided to cut the repo rate by 25 basis points to 7%. This means that the prime lending rate drops to 10,5%.
Kgyanyago was speaking in Pretoria.
The MPC also cut the repo rate by 25 basis points at the last meeting.
The decision to cut the rate is in line with the expectation by Independent Economist, Elize Kruger.
Kruger earlier said subdued consumer price inflation, muted economic growth, and with real rates remaining restrictive, left the door open for additional monetary support.
The MPC cut rates by 25-basis points at the last meeting which took the repo rate to seven-point-two-five percent and the prime lending rate to ten-point-seven-five percent. When the bank cut rates at the last meeting, it also expressed that it was considering a scenario with a lower inflation target range for South Africa.
“Inflation data for the month of June suggests that inflation remains well under control in South Africa. Headline inflation came in at 3% up from 2,8% in May it’s still at the bottom of the Reserve Bank’s 3 to 6% target band. From that view, I’m still positive that the Reserve Bank can still cut interest rates by 25 basis points at the end of July as inflation remains well under control and the economy remains quite weak and the combination opens a window for a further cut in interest rates,” said Kruger earlier.
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