WATCH: MPC decides on interest SA rates
JOHANNESBURG - All eyes are on the South African Reserve Bank governor Lesetja Kganyago as he announces the latest decision on South Africa's interest rates.
On 14 April and in the wake of the national disaster that South Africa finds itself in because of the coronavirus outbreak in the country and globally, the Monetary Policy Committee (MPC) of the South African Reserve Bank decided (SARB) to cut the repo rate by 100 basis points.
Kganyago said at a previous announcement, "The implied path of policy rates over the forecast period generated by the Quarterly Projection Model indicated three repo rate cuts of 25 basis points each in the second and fourth quarter of 2020, as well as in the third quarter of 2021. Monetary policy can ease financial conditions and improve the resilience of households and firms to the short-term economic implications of Covid-19. Our decision and its magnitude seeks to do this in the near term."
"Monetary policy however cannot on its own improve the potential growth rate of the economy or reduce fiscal risks. Current economic conditions underscore the importance of implementing prudent macroeconomic policies and structural reforms that lower costs generally, and increase investment opportunities, potential growth and job creation," Kanyago added.
WATCH: South African Reserve Bank governor Lesetja Kganyago make his announcement below:
Bianca Botes, Executive Director at Peregrine Treasury Solutions, said, "All eyes will be on Sarb this afternoon, with a minimum of 50 basis points interest rate cut expected, in an effort to assist the local economy. Deeper than expected cuts by Sarb could cap the rand gains."