South African Reserve Bank Repo Rate Sliced 25 BPS to 6.25%

January 16, 2020

Policymakers at the South African Reserve Bank voted unanimously to cut the central bank’s repo rate by a further 25 basis points to 6.25%. This follows an initial 25-bp cut last July that reversed a 25-bp hike in November 2018. In a released statement, bank officials announced downward revisions to the growth path, which overall is weak, and indicated that both inflation and price expectations are subsiding. The rand has strengthened some 2.6% versus the dollar since the prior policy review.

The MPC welcomes the lower inflation outcomes and continued moderation in inflation expectations. While the Committee would like to see inflation expectations anchored closer to the mid-point of the inflation target range on a sustained basis, the lower inflation forecast and improved risk profile opens some space to provide further policy
accommodation to the economy.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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