SARB Governor Lesetja Kganyago on Thursday announced that the central bank will cut the repo rate by 25 basis points, meaning rates will drop by 0. 25%.
South Africa n Reserve Bank Governor, Lesetja Kganyago , during a media briefing. Photo: FileThe start of 2025 has been a see-saw for South Africa n consumers, with fuel prices increasing for the first two months, while the South Africa n Reserve Bank announced a cut in interest rates this past week.
Kganyago said during his address, “At our last meeting, we warned about a more challenging global environment. Some of the risks we saw then have since materialised. In particular, the outlook for monetary policy in the United States has changed. The space for rate cuts by the Federal Reserve now looks limited, with core inflation still elevated, and new inflation risks emerging such as rising trade tariffs. It is even possible that US rates could go up again, to stabilise inflation.
Frank Blackmore, the lead economist at KPMG, said that the uncertainty regarding the global economy was one of the main factors for the Monetary Policy Committee’s cautious approach to the repo rate. “Saying that, we have now reduced from the highs of 8.25% to the current rate of 7.50% leaving the prime interest rate at 11% and this trend is going to continue into 2025 and will be data dependent as it was emphasised by the bank itself,” Blackmore added.
“Simply put, this means that the cost of living is increasing at a slower pace – however, this has no bearing on consumers right now, with the exorbitant prices for most foods and other livings costs continuing to put unbearable financial strain on households,” Roets further added.
Sa Reserve Bank South Africa Lesetja Kganyago Free Market Economy National Government Business Finance Gdp Money Matters Consumers Investing Government Of National Unity Interest Rates Inflation
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