Future repo rate decisions to be data dependent, says Kganyago

Reserve Bank Governor Lesetja Kganyago said that the bank would continue to monitor growth, inflation and other economic data before deciding on the direction of the repo rate in the future.

FILE: South African Reserve Bank Governor Lesetja Kganyago. Picture: @SAReserveBank/Twitter

JOHANNESBURG - Reserve Bank Governor Lesetja Kganyago said that the bank would continue to monitor growth, inflation and other economic data before deciding on the direction of the repo rate in the future.

The bank announced a 25 basis point cut on Thursday.

It's now reduced the repo rate by 300 basis points this year, with calls for more cuts.

Governor Lesetja Kganyago said that the country's economy was set to contract by 7.3% this year.

But there is good news ahead.

"Getting back to pre-pandemic activity levels will take time. GDP is expected to grow by 3.7% in 2021 and by 2.8% in 2022."

Added to this, FNB sales head Palesa Mabasa said that the low interest rate would help business.

"The lower borrowing costs will hopefully give much-needed breathing room to businesses as they seek to respond, something which the country will need as we move forward."

The real estate industry has also joined many others in welcoming the lower repo rate.

But Governor Kganyago said that future decisions would be data dependent and inflation must be kept in check.

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