SARB CUTS INTEREST RATES
The South African Reserve Bank (SARB) has announced that it has cut interest rates by 25 basis points.
This means the repo rate is now at 7.50%.
Four members of the SARB voted for the cut and two members voted against the change.
BusinessTech reports that the SARB believes that inflation should remain below the 4.5% target for the first half of the year. However, headline inflation should revert to around 4.5% after the period as core inflation remains at its normal target.
The bank said that the country’s GDP was influenced by extremely weak agricultural production during the third quarter, but that it expects a recovery in agricultural production in the fourth quarter.
The SARB also said that a higher spending rate was visible due to the two-pot withdrawals by consumers.
The bank noted that both the manufacturing and mining sectors have shown disappointment in growth with levels that are still below those seen during the COVID-19 pandemic.
The SARB said it expects the GDP growth to reach 2.0% by 2027.
Image credit: The Citizen