The South African Reserve Bank has reduced the repo rate by 25 basis points to 7.50%, which is in line with expectations as inflation continues to decline. This decision, supported by four out of six members of the Monetary Policy Committee (MPC), reflects a December inflation rate of 3.0%, well below the 4.5% target. The move is aimed at stimulating economic growth and easing financial pressures on consumers.
Independent Economic Analyst Bonke Dumisa explained that the Reserve Bank’s primary mandate is to implement monetary policy and keep inflation as low as possible.
He stated, “If the Reserve Bank doesn’t keep its eye on inflation, we could end up in a situation like we had in 1998, where interest rates soared to over 23%, and many people lost their homes and cars.”
Dumisa commended the Reserve Bank for its efforts in maintaining low inflation, noting, “The Reserve Bank is doing a good job in ensuring that inflation remains low.”
Regarding the impact of the repo rate cut on consumers, Dumisa highlighted, “Consumers should have already received notifications from their financial institutions, such as SMS or emails, informing them of repayment adjustments. If they haven’t received these updates yet, they will soon, as the institutions must make the necessary adjustments.”
Listen to the full interview below:
VOC News
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