SA lending rate will remain low as cash-strapped consumers battle pandemic
Reserve Bank Deputy Governor Fundi Tshazibana was speaking at the Absa annual fixed income conference, where she said the South African economy is likely to recover to pre-crisis levels at the end of next year or in 2022.
JOHANNESBURG - Reserve Bank Deputy Governor Fundi Tshazibana on Wednesday said the country's lower lending rate could stay for next two years.
Interest rates have been cut by 300 basis points so far this year in an effort to help cash-strapped consumers.
Tshazibana was speaking at the Absa annual fixed income conference, where she said the South African economy is likely to recover to pre-crisis levels at the end of next year or in 2022.
She added that despite the fiscal and monetary support provided, South Africa would still take about two years to recover from the economic impact of the COVID-19 pandemic.
But, she said consumer inflation was likely to remain within the target range of between 3% and 6% - allowing the Reserve Bank to keep a stable rate stance.
Added to this, Tshazibana said the lockdown has forced many companies to adapt to different ways of work and of doing business, which, if implemented on a larger scale in the coming years, could boost production.
She pointed out that automation, e-commerce and remote working have a potential to play a greater role in economic activity in future.
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