Reserve Bank cuts repo rate to 4.25%

SA Reserve Bank Governor Lesetja Kganyago said that inflation was under control for now but this could change and the bank has needed to act.

South African Reserve Bank (Sarb) Governor Lesetja Kganyago. Picture: @SAReserveBank/Twitter

JOHANNESBURG - The South African Reserve Bank (Sarb) has announced an emergency cut of the repo rate by another 100 basis points.

This brings the country's rate to 4.25%.

The bank cut the rate by one percentage point last month.

Reserve Bank Governor Lesetja Kganyago said that the country's economy was under pressure and growth forecasts in negative territory.

"The bank expects GDP in 2020 to contract by 6.1% compared to -0.2% expected just a few weeks ago."

He said that China appeared to be recovering and this was good news for economies, including South Africa.

However, for now, the rand was still under pressure.

"The rand has depreciated by 22.6% against the US dollar since January and by 17.3% since the March meeting of the MPC."

Governor Kganyago said that inflation was under control for now but this could change and the bank has needed to act.