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Reserve Bank Governor Gill Marcus announces the MPC rate decision in Pretoria. Photo: Leon Nicholas
The Monetary Policy Committee of the South African Reserve Bank on Thursday decided to cut the repo rate by 50 basis points to 6 percent.
The lowering brings interest rate reductions since December 2008 to 600 basis points and takes borrowing costs to a new three-decade low.
The Reserve Bank said inflation was contained and the economy is likely to moderate further.
Previous monetary stimulus has helped to raise consumer spending a bit but the outlook is weak as households remain highly indebted.
The supply side of the economy is also struggling, with factory output growth slowing to 7.5 percent year-on-year in July compared with June's 9.3 percent.
A firmer rand currency, high input labour and electricity costs are expected to weigh on production prospects in the next few months.
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