Interest rates reduced to 6.25% per annum, what now?

South African Reserve Bank (Sarb) Governor Lesetja Kganyago announced today the bank's latest decision on interest rates following the three-day meeting of the monetary policy committee (MPC)

The Bank reduced the repurchase rate by 25 basis points to 6.25% per annum .

There are a number of reasons that supported a cut. We do not have inflation problems for now. Growth was expected to improve but now expectations for growth have been reduced. Growth prospects have been largely driven by Eskom's inability to provide electricity to SA corporates.

Isaah Mhlanga, Executive Chief Economist - Alexander Forbes Investments

The Reserve Bank does inflation targeting to make sure that prices are stable in the interest of balanced and sustainable economic growth. We need 2,6% upwards, sustainably. We are nowhere close to that. We are facing an economic crisis.

Isaah Mhlanga, Executive Chief Economist - Alexander Forbes Investments

Potentially this is the first of two cuts this year but the Reserve Bank is likely to wait and see what happens in the budget and what Moody's is going to do - and the reaction of financial markets to that.

Isaah Mhlanga, Executive Chief Economist - Alexander Forbes Investments

Listen to the sound clip below.

Get the 10 most-read articles of the week from Bruce Whitfield’s The Money Show, emailed to you every Friday morning.

Subscribe to our Business Wrap Newsletter


This article first appeared on CapeTalk : Interest rates reduced to 6.25% per annum, what now?


Recommended

by NEWSROOM AI
Read More
The Money Show's Bruce Whitfield reports from Davos, Switzerland

The Money Show's Bruce Whitfield reports from Davos, Switzerland

Deep Fakes and bigwigs: Bruce Whitfield interviews several captains of industry at Davos 2020.

'22 richest men have more money than all 600 million African women put together'

'22 richest men have more money than all 600 million African women put together'

If Jeff Bezos and Bernard Arnault – the world’s two richest men – sat on their wealth piled up in $100 bills, they’d be in space!

The stock picks of the day: Salesforce, Spotify  and Standard Bank

The stock picks of the day: Salesforce, Spotify and Standard Bank

The pick of the day's crop as chosen by Caroline Cremen, Portfolio Manager, Adviceworx.

 TV anchor Macfarlane Moleli talks money

TV anchor Macfarlane Moleli talks money

Macfarlane Moleli tells The Money Show how he structures his life and sets goals.

[WATCH] Mother posting only school lunches on TikTok goes viral

[WATCH] Mother posting only school lunches on TikTok goes viral

Khabazela shares some of the videos that went viral on Twitter and Facebook.

Cell C is pawning off contract phone customers - its crown jewels - to Vodacom

Cell C is pawning off contract phone customers - its crown jewels - to Vodacom

Cell C is pawning off its contract customers to Vodacom.

Popular articles
[WATCH] A guy's attempt to pronounce pneumonia has social media in stitches!

[WATCH] A guy's attempt to pronounce pneumonia has social media in stitches!

Khabazela shares tweets and Facebook posts that have gone viral.