The SA Reserve Bank has cut the repo rate by 100 basis points, or one percentage point. This brings SA’s repo rate to 4.25%.
Reserve Bank governor, Lesetja Kganyago, said the decision by the bank’s Monetary Policy Committee was unanimous. The cut will go into effect on April 15.
Tuesday’s announcement was the second major cut in less than a month, after the central bank cut the rate by one percentage point in mid-March. In mid-January, meanwhile, the bank lowered the rate from 6.5% to 6.25%.
“The May 2020 meeting of the MPC was moved earlier and took place today [Tuesday],” the bank said in a tweet, where it also announced the rate cut.
The repo rate is the benchmark interest rate at which the Reserve Bank lends money to other banks.
The unexpected cut caused the rand, which had been firming during the morning, to weaken from R18.02/$ to around R18.17/$.