RESERVE BANK LOWERS INTEREST RATES

The South African Reserve Bank has announced that the country’s interest rate will be lowered by 25 basis points.

The interest rate is now at 7%.

The bank’s Governor Lesetja Kganyago said the decision to lower the interest rate was unanimous.

The prime rate at which banks lend money to customers is now at 10.50%.

This is the second time this year that the interest rate has been cut.

During the press conference, Kganyago said US President Donald Trump’s warning of the 30% tariff hike, which is set to start on 1 August, was the main reason for the announcement.

“The United States paused tariff increases in April, but that pause expires tomorrow, and many countries do not yet have new trade deals.”

Kganyago said the world economy has shown resilience against the US’s tariff increases.

“To date, global economic activity has been broadly resilient to these stresses. The world growth outlook is largely unchanged from our last meeting. But there are risks that permanently higher tariffs, or adverse geopolitical developments, could cause more disruption to the global economy than we have seen so far this year.” 

Image credit: The South African