Kganyago expects economy to bounce back in 2021
South African Reserve Bank Governor Lesetja Kganyago said that inflation was stable and growth needed to be boosted.
JOHANNESBURG - The South African Reserve Bank said that while growth was expected to contract by 7% this year, the local economy should bounce back next year.
Governor Lesetja Kganyago has announced more help for cash-strapped South Africans who are in debt with a 50 basis point reduction in the repo rate.
This is the latest in a series of rate decreases as South Africans battle to pay their bills in the wake of the coronavirus.
The reserve bank had been cautious when cutting rates, citing inflationary pressures.
However, when COVID-19 hit South Africa, this stance changed.
Kganyago said he was concerned about jobs being lost.
"Exports and imports are expected to decline sharply. Job losses are also expected to be widespread."
He said that inflation was stable and growth needed to be boosted.
"Inflation is expected to be well-contained over the medium term."
The Monetary Policy Committee has decreased the repo rate by 250 basis points over the past several weeks, with smaller decreases in the months before.
This has provided huge relief for those with debt.