JOHANNESBURG, Sept. 19 (Xinhua) -- The South African Reserve Bank (SARB), the country's central bank, said Thursday that it has decided to cut the repurchase rate by 25 basis points to 8 percent, effective from Friday.
SARB Governor Lesetja Kganyago said while the decision to reduce the main lending rate by 25 basis points was unanimous, there had been discussions about a potential 50 basis point cut. "Our approach is risk-based, and we exercise judgment. It all depends on the assessment of the risk," Kganyago explained.
With the Consumer Price Index reaching 4.4 percent this week, Kganyago said this figure did not significantly influence the bank's decision. Instead, the bank primarily considered "future inflation and risks."
Kganyago said economic growth is expected to improve in 2024 as electricity availability becomes more stable. Recent changes allowing workers to access a portion of their retirement pensions could further boost spending.
"For the medium term, our growth projections have once again edged higher. The upgraded forecast is based on better-functioning network industries, especially electricity, along with broader reform momentum," Kganyago said.
Projecting GDP growth at around 2 percent, Kganyago expressed concern about low levels of investment. "A particular concern is investment, which has been contracting for four consecutive quarters," he said, adding that the scale and speed of investment will be crucial indicators of South Africa's long-term economic prospects.
