BREAKING: Sarb cuts interest rates by another 100 basis points

The South African Reserve Bank (Sarb)  has announced a further 100 basis point cut to the repo rate, bringing it down to 4.25%. 

This comes after the Sarb announced a 100 basis point cut in March that brought the rate down to 5.25%. 

The announcement made on the bank’s Twitter account also comes as the Minister of Finance, Tito Mboweni, is set to address media about the recent rating downgrades by Moody’s and Fitch which are expected to have a severe impact on public finances. 

“The May 2020 meeting of the [Monetary Policy Committee] was moved earlier and took place today,” said the Sarb on Twitter. 

The MPC will host a media briefing today Tuesday April 14, 2020 at 11h30.

Read: Sarb announces new liquidity measures to support banks

In its latest Monetary Policy Review, the Sarb said that South Africa’s economy was expected to contract by between 2% and 4% this year should the lockdown be extended. 

The bank also acknowledged that there was room to offer more stimulus to the economy as inflation remained within the 3% to 6% target range. 

In the March MPC meeting, it projected that inflation would be 3.8%, 4.6% and 4.4% for 2020, 2021 and 2022 respectively.  

The bank has also previously announced a series of instruments and measures to assist banks and support the flow of money market liquidity.