Economist Raymond Parsons said the South African Reserve Bank (SARB) Monetary Policy Committee made the right decision by resuming its interest rate-easing cycle. On Thursday, the committee announced a 25-basis point reduction in interest rates.
As a result, the prime lending rate drops to 10.75 percent and the repo rate to 7.25 percent.
Parsons emphasized that even a small interest rate cut at this stage can positively influence the tone of the national economy and boost confidence levels.
“The reserve bank has however reduced its growth also reduced its growth forecast for the year, presenting several challenges to our policy makers and decision makers to improve the country’s growth prospects,” he stressed.
