South Africans were surprised and delighted by the Reserve Bank’s decision yesterday to cut its interest rate for banks, known as the repo rate, by 0.5 percent.

This was the first reduction since 2010.

FNB property spokesman John Loos had only expected a possible interest-rate cut in September.

He had some reservations about the appropriateness of the cut, although it could be a mildly positive stimulus for the residential property market.

Consumers were too highly indebted, with debt-to-disposable income at 74.7 percent, he said.

FNB Home Loans said households should strengthen their balance sheets.

Business Unity South Africa welcomed the decision.

The SA Chamber of Commerce and Industry said the cut was unlikely to improve economic activity. – Sapa