WATCH: Wrap Up of SA's Top Business News
JOHANNESBURG - The South Africa Reserve Bank is expected to cut interest rates by 50 basis points on May 21 to a record low of 3.75 percent to ease the pain of the country's recession, as this quarter shows signs of a steep downturn due to limited economic activity, a Reuters poll found.
South Africa's government has implemented a nationwide lockdown to contain the spread of the coronavirus while the Reserve Bank has been buying secondary market bonds to deal with the economic impact. The Treasury is due to introduce a new budget on June 24 to add more stimulus.
"As the negative impact of the continued lockdown becomes more clearly quantifiable, there is room for a further rate cut of 50 basis points given current inflationary expectations," said Frank Blackmore, an economist at EF Consult.
Nine of 20 economists surveyed in the past week said the central bank would cut rates by 50 basis points to 3.75 percent next week. Four expect just a quarter-point trim. Three said the repo rate would be eased by 75 basis points and three expect no change.
SAA administrators will not sell assets without involving govt - memorandum
Administrators at state-owned South African Airways (SAA) will not sell assets for an interim period without involving the government, a memorandum signed by one of the administrators and the public enterprises ministry showed.
The memorandum, which was seen by Reuters, also said the administrators and the ministry had agreed that the objective of SAA's bankruptcy protection process was to have a restructured SAA or a new company with no reliance on public finances.
A public enterprises ministry spokesman confirmed the memorandum was an authentic document.
The administrators were not immediately available for comment.