South African Repo Rate cut 25 Basis Points to 6.5%

July 18, 2019

The South African Reserve Bank by unanimous vote has implemented its first interest rate cut in 16 months, a 25-basis point cut of the repo rate to 6.5%. A released statement observes moderating inflation expectations, signaled policy easing by advanced economy central banks, weaker-than-anticipated global economic activity, and “escalating trade and geo-political tensions.” Officials expected a lull in growth during the first quarter not to have extended into the following period. “The implied path of policy rates generated by the Quarterly Projection Model was for one cut of 25 basis points to the repo rate by the end of fourth quarter of 2019.”

Today’s action reverses a 25-basis point rate hike in November 2018. Previously, a pair of 25-bp cuts were made in July 2017 and March 2018, but before that came six hikes totaling two percentage points to 7.0% done from June 2014 through March 2016.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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