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Overburdened consumers hoping for interest rates cut

Economists believed the central bank would cut rates by 25 basis point to help boost the sluggish economy.

FILE: Reserve Bank governor Lesetja Kganyago. Picture: EWN.

JOHANNESBURG - Overburdened consumers were hoping for some relief on Thursday when the South African Reserve Bank was expected to announce any movement on interest rates.

Economists believed the central bank would cut rates by 25 basis point to help boost the sluggish economy.

If interest rates were cut by the Reserve Bank, it would be the first easing in policy in over a year.

This would mean good news for consumers who were already battling to make ends meet.

Economist at Momentum Sanisha Packirisamy said an interest rate cut was much needed.

“I think any relief that consumers can feel, potentially with an interest rate cut coming along, would boost sentiments a bit and help aid consumer spending in the medium term.”

FNB economist Wayne McCurrie agreed.

“It’s only a quarter of a percent, so not nearly symbolic but it is a real cut and at this margin, there’s every likelihood there’ll be another cut later on this year as well.”

McCurrie said not only would that be good news for consumers, but it would also help grow the struggling economy.

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