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South African Reserve Bank governor Gill Marcus. Photo: Leon Nicholas.
South Africa's Reserve Bank cut its repo rate by 50 basis points to 5.5 percent as expected on Thursday, as the economy struggles after last year's recession and inflation remains within target.
Thursday's move adds to 600 basis points of reductions in interest rates since December 2008 and leaves the repo rate at its lowest level since the central bank introduced the measure in 1999.
Analysts polled by Reuters last week saw a 60 percent probability of a rate reduction, with 16 of 21 economists surveyed predicting the Reserve Bank would cut the repo rate by 50 basis points to 5.5 percent.
Reserve Bank Governor Gill Marcus said the domestic economic recovery remained fragile, with adverse global developments making the outlook more uncertain but cautioned that the scope for further downward movement in rates was limited.
Latest data from Statistics South Africa shows annual consumer inflation slowed to a 5-year low of 3.2 percent in September, at the low end of the central bank's 3-6 percent target range.
Analysts said a strong rand also gave the Reserve Bank leeway to cut rates, with the currency gaining nearly 27 percent against the dollar since 2009, largely due to large capital inflows as foreigners take up South Africa's high-yielding assets. - Reuters
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Shaun, wrote
Iceman, wrote
mmmmm, what country again has a 0% intrest (lending) rate and is a 1st world country again...mmmm let me think.....
Anonymous, wrote
The banks can't reduce their interest rates to 5.5% because they won't make the same exorbitant profits that they are used to. In any case they can't because these dummies don't make those kind of decisions on their own . . . "it's all up to the computer."
Anonymous, wrote
The banks can't reduce their interest rates to 5.5% because they won't make the same exorbitant profits that they are used to. In any case they can't because these dummies don't make those kind of decisions on their own . . . "it's all up to the computer."
Mr B, wrote
Sooner or later the repo rate will start climbing again and you'll all hate her... what a fickle bunch! :)
Peter, wrote
to Skipper. Right on, you are the only one to have assessed this correctly. What's the point of saving, let's spend, spend and if we haven't got it, let's get another credit card. Way to go - DOWN.
john, wrote
A year away from pension - I need the cuts to stop (never thought I would want that - but wait until you all get older).
Rico, wrote
Anonymous, wrote
Why cant the commercial banks do the same? All commercial banks seem to charge the same interest rates for credit given to consumers. Why is it like that? There is very little choice one can make in chosing which bank to get a loan from. Doesnt the word competition in commercial banking business exist? High service fee charges one of the highest in the world.
Anonymous, wrote
mandla - what are you complaining about? She cut the interest rate by .5% to 5.5% as the article says... Do you feel it should be higher?
saspai, wrote
Happy citizen, wrote
Mandla, wrote
Happy citizen, wrote
Skipper, wrote
So ..... Aunty Gill has looked after all those who cannot (will not!) control their finances and given a big finger to all the reliable people who have saved their money iso wasting it. Sounds the right move for a banana republic to go marching on !
DJ Sabre, wrote
This is great news. I hope that the petrol price will come down for the festive season so that many people can have a bit extra to the things they planned. Thanx Gill fo your generosity at this time of year.
Anonymous, wrote
kuvha, wrote
annie, wrote
Anonymous, wrote
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