SA Reserve Bank cuts repo rate offering relief to consumers

SOUTH Africans repaying vehicle, home loans and other debts received some good news yesterday as the South African Reserve Bank (SARB) lowered the repurchase rate (repo rate) for the country.

- ASHLEY LECHMAN

SARB Governor Lesetja Kganyago announced a cut to the repurchase rate (repo rate) by 25 basis points (BPS).

This came after the central bank’s Monetary Policy Committee (MPC) met this week and voted to decrease the repo rate.

This means that the repo rate will decrease from 7.50% to 7.25% and the prime lending rate will decrease from 11% to 10.75%.

“In the previous MPC statement, we warned of downside risks to our growth forecast. We have now trimmed our GDP projections and currently expect growth of 1.2% this year. The outlook for structural reforms remains positive, but there are also headwinds,” Kganyago said.

Dr Andrew Golding, the CEO of the Pam Golding Property, said the cut was welcome relief for consumers.

“The MPC seized the opportunity to give South Africa’s economy a much-needed boost in sentiment,” he said.