South Africa Cuts Key Interest Rate to 7.75%
The South African Reserve Bank (SARB) slashed its key interest rate by 25 basis points to 7.75% in line with analysts’ estimates.
The decision to lower the repo rate opens a new tab by 25 basis points (bps) to 7.75% was unanimous, with no discussion about a larger 50 bps cut, South African Reserve Bank Governor Lesetja Kganyago told reporters.
The latest rate cut has brought borrowing costs to their lowest level since April 2023. Policymakers highlighted that while inflation remains well-contained in the near term, the medium-term outlook is highly uncertain, with notable upside risks.
Headline inflation fell below the target range, reaching 2.8% in October, reflecting a stronger exchange rate and lower oil prices compared to last year.
Data released on Wednesday showed inflation had dropped below the central bank’s 3% to 6% target range, which boosted analyst bets of a potentially steeper reduction.
These temporary supply shocks are expected to keep inflation below 4% until mid-2025.
The SARB only made slight tweaks to its inflation projections for the next few years, and still sees inflation staying below 4% until the middle of next year. # South Africa Cuts Key Interest Rate to 7.75% Equities Investors Wealth Rises as Nigerian Exchange Rally
