The repo rate will be lowered from 6.5% to 6.25%, following a unanimous vote by the South African Reserve Bank’s (SARB) monetary policy committee, the central bank’s governor Lesetja Kganyago announced in Pretoria on Thursday.
This marks the first change to the repo rate since July last year, when it was cut by 25 basis points to 6.5%.
Kganyago warned that the economy is unlikely to grow at a satisfactory rate amid the problems struggling power utility Eskom faces, adding that business confidence in South Africa is low.
The SARB predicts the SA economy will be shown to have expanded by a minuscule 0.4% last year, with the outlook for this year and 2021 downgraded by 1.2% and 1.6%.
The repo rate is the SARB’s interest rate for lending money to other banks.