South Africa surprises markets with rate cut

Photo: Elske Photography

The monetary policy committee of the South African Reserve Bank (Sarb) unexpectedly cut rates on January 16 in a bid to boost weak growth.

In a unanimous decision, rate-setters reduced the repurchase rate by 25 basis points to 6.25%, and the prime rate to 9.75%. This is the first rate reduction since July 2019, when the committee also cut the repo rate by 25bp.

“The lower inflation forecast and improved risk profile opens some space to provide further policy accommodation to the economy,” the

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