The Monetary Policy Committee of the South African Reserve Bank has cut the repo rate by a 100 points — the second time it has done so in less than a month as worries mount over the impact of the Covid-19 lockdown on economic growth.

The move takes the repo rate to 4.25%/annum.

“The May 2020 meeting of the MPC was been moved earlier and took place today (Tuesday),” the Bank said in a statement.

The central bank said last week it has the space to respond to turmoil from the coronavirus pandemic thanks to inflation that’s projected to be below the midpoint of its target range. At the time, the Bank said the outbreak and national lockdown could see the economy contract by 2% to 4% this year. Since then the lockdown, which was due to end on 16 April, was extended by a further two weeks.

“This comes as a result of the extension of the lockdown because extending for another two weeks is certainly going to have a far more severe impact on the economy,” said Gina Schoeman, Citibank South Africa economist.  — (c) 2020 NewsCentral Media, with additional reporting by Rene Vollgraaff, Prinesha Naidoo and Zoe Schneeweiss, (c) 2020 Bloomberg LP