Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. The South African Reserve Bank (SARB) have announced that they will drop the interest rate dramatically in South Africa to combat the economic impact … mpu1. The Reserve Bank has repeatedly said that monetary policy alone cannot help South Africa’s economy and has a track record of being cautious when moving down — the last time it cut at consecutive meetings was in 2010.In addition to the US Federal Reserve cutting its main interest rate twice this month to near zero, emerging-market peers Pakistan, Turkey and Egypt eased by between 75 and 300 basis points this week.While Governor Lesetja Kganyago ruled out an emergency meeting in response to the virus after the Fed called such a gathering early in March, it is now urgent enough for a 50 basis-point cut, according to PwC economists Lullu Krugel and Christie Viljoen.Two interest rate cuts of 25 basis points each in March and May would suggest the bank is not in panic mode, according to PwC.“Significant monetary policy easing – combined with faster implementation of economic reforms, as indicated in the budget review 2020 – is required to boost the South African economy,” Krugel and Viljoen said in a note.“This could add 0.3 percentage points to economic growth over the next 12 months. Leave this field empty if you're human: mpu2. The decision was not unanimous as two of the five-member committee voted to hold the … And there is no risk to the inflation outlook from this suggested stimulus.”Since Kganyago was appointed governor in November 2014, the MPC has made a 50 basis-point move only once, and that was an increase. The last 50 basis-point cut was in July 2012, when inflation was at 5%.That compares with 4.6% reported for February, which saw the rate above the midpoint of the central bank’s 3% to 6% target band for the first time in 15 months.President Cyril Ramaphosa said the government is planning fiscal measures to support the economy, but with a budget deficit close to a 30-year high the scope to do so is limited.To effectively shore up the economy, a rate cut would have to come hand-in-hand with fiscal and health-care stimulus which could be achieved by re-prioritizing current spending plans, according to Reezwana Sumad, an analyst at Nedbank Group Ltd.“The reasons for a cut wouldn’t be grounded in fundamentals,” she said. The Committee noted that the economic contraction and slow recovery will keep inflation below the midpoint of the target range. The South African economy with a population of 49.99 Million (Est 2010) ranks 25th in the world with a GDP PPP of 492 billion and GDP PPP per capita of 10,229 vs 45,934 (United States) according to the IMF in 2009. It was the 2nd straight rate cut so far this year, bringing borrowing costs to the lowest since December of 2013. Bank deposits held for a fixed term in South Africa are called fixed deposits. The Trading Economics Application Programming Interface (API) provides direct access to our data. Forward-rate agreements show traders have switched from pricing in a less than 50% chance of a 25 basis-point cut three weeks ago to betting on a 100% chance that the central bank will cut by 50 basis points.With an economy that slumped into a recession even before the coronavirus intensified, South Africa’s inflation-targeting central bank is facing calls to ease policy to support economic growth. Prime rate full listing - All current and historical prime rate as well as up to date economic indices
The South Africa Reserve Bank slashed its key repo rate by 25bps to a new all-time low of 3.50% on July 23rd 2020, as widely expected. The move follows a 100bps rate cut in April’s emergency meeting, bringing borrowing costs to its lowest level on record, amid the coronavirus crisis. Interest Rate Decision Share this article: Share Tweet Share Share Share Email Share. The Committee also relaxed regulatory requirements on banks aiming to free up more capital for lending by financial institutions to households and firms. The cut was the fifth in a row and brought total easing this year to 300 basis points.Focus Economics Consensus forecast projects the repurchase rate to end 2020 at 3.44% and 2021 at 3.82%.5 years of economic forecasts for more than 30 economic indicators.Get a sample report showing our regional, country and commodities data and analysis.