Development economist at the University of Stellenbosch Business School, Dr Nthabiseng Moleko, described the economy as reaching desperate times in 2020.
The country’s banks, some of the largest on the continent including Standard Bank and FirstRand, have seen profit growth slip in recent years, while risks from lending to the increasingly strained government and the economy have increased.
The South African Reserve Bank announced on Tuesday that a contraction of 6.1% is forecast for South Africa’s GDP this year.
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.
The South African Reserve Bank has slashed its growth forecasts for this year, predicting that the economy could shrink by between 2% and 4%.
The repo rate is the rate at which the central bank lends money to commercial banks.
The South African Communist Party said on Wednesday that the mandate of the central bank should be expanded to explicitly include job creation.
The review dimmed hopes for the economic rebound promised by President Cyril Ramaphosa and comes less than a month before national elections.
There's an assumption that a change of ownership would automatically mean a change in the role the bank plays.
The ANC said the bank should broaden its focus to boost employment and economic growth.
With global growth weakening, some economists expect no change in South African policy across the forecast horizon.
Daniel Mminele said the bank expected the rand to average 14.50 against the dollar but trade would be volatile, forcing the monetary policy committee to remain flexible in its responses.
Finance Minister Tito Mboweni delivered his budget policy speech in Parliament on Wednesday afternoon.
The repo rate has been at 6.5% since March this year when it was cut by 25 basis points.
The South African Reserve Bank on Friday launched banknotes and R5 circulation coins in honour of Madiba’s centenary year.
All 25 economists surveyed in the past week said the Reserve Bank would keep rates unchanged at 6.50% on 19 July.
The police portfolio committee, Police Minister Bekhi Cele and numerous other role-players are meeting on Wednesday.
For the state to nationalise the Reserve Bank, it will have to buy out its shareholders, which will come at a hefty bill to the already strained fiscus.
