SARB Cuts Interest Rates By 100bps To Counter Coronavirus Threat

Thebe Mabanga

The Reserve Bank cut the repo rate by 100 basis points, down from 6.25% to 5.25% in a unanimous decision by the Monetary Policy Committee, partly in response to the economic slowdown due to the outbreak of the novel Coronavirus.

This brings the repo rate to within 0.25% of its lowest levels since 2013.

Lesetja Kganyago, Reserve Bank Governor, said the bank now expects inflation to moderate, largely due to lower oil prices.

“Globally, a once-healthy economic growth outlook has been revised down sharply due to the outbreak and spread of Covid-19,” said Kganyago at a virtual press conference held in Pretoria.

“This coronavirus will negatively affect global and domestic economic growth through the first half of 2020, and potentially longer depending on steps taken to limit its spread.”

Domestically, Kganyago said the bank expects exports to be the hardest-hit sector.

“The domestic economic outlook remains fragile. At