Many pleasantly surprised by South African Reserve Bank’s repo rate cut
JOBURG – Twitter was happily surprised by the announcement made by the Reserve Bank to cut the repo rate by 1 per cent.
The Monetary Policy Committee (MPC) of the South African Reserve Bank’s decision to cut the repo rate by 100 basis points, 1 per cent, surprised many on 14 April.
This takes the repo rate to 4.25 per cent per annum.
This decision was also taken in mid-March to cut the repo rate by 1 per cent. This is in reaction to the Covid-19 outbreak. The South African economy has been struggling even before the coronavirus pandemic with the country slipping into a technical recession and the rand weakening during the national lockdown.
The Reserve Bank has predicted that more than 300 000 jobs would be lost this year due to the lockdown.
What does the decline of the repo rate mean? It means that banks might decide to reduce their lending rates, individual loans will be less expensive and people will pay less on their debt.
The Twitter reaction was quite swift, with many pleasantly surprised while others wondered if the cut in the repo rate was enough due to the nature of the economy during the lockdown.
Economists have said South Africa's Reserve Bank needs to do more to support the economy.
It just did by slashing interest rates by another 100 basis points, taking the repo rate to 4.25%. Will the #SARB's latest move be enough, I wonder?— Fifi Peters (@FifiPeters) April 14, 2020
Reserve Bank has cut the repo rate by 100 basis points. This takes the repo rate to 4.25% per annum.🙏🏾🙏🏾🙏🏾
— Injoli yeSizwe (@osipuka) April 14, 2020
https://twitter.com/SizweDhlomo/status/1249989029560492034
South Africa may lose about 370 000 jobs this year as a result of the national lockdown and initiatives to stop the spread of the coronavirus, according to a forecast by the Reserve Bank of South Africa.
— CareerAid (@CareerAidAfrica) April 14, 2020
Just got a press release stating that the South African Reserve Bank expect over 1,600 small businesses going insolvent during the lockdown & around 370,000 jobs lost in the formal sector alone. This is just during this lockdown and extension. Absolutely heartbreaking.
— Brent Lindeque (@BrentLindeque) April 14, 2020
SURPRISE ANNOUNCEMENT: Reserve Bank cuts interest rate by further 100 basis points leaving dollar above R18 mark.
Must have surprised many traders as last Monday came across hawkish on further rate cuts.
Bit contradictory.
Will banking sector welcome it?— Hanief Haider (@haniefhaider) April 14, 2020
https://twitter.com/WelsWG/status/1249988012735434752
1% off my bond🕺🕺😎
— Rumani® (@MrumaDrive) April 14, 2020
Reserve Bank slashes repo rate by 100 basis points. 🕺🏽🕺🏽👌🏻👌🏻👌🏻
— Londi Nkosi 🇿🇦 (@LondiNkosi_) April 14, 2020
The South African Reserve Bank is playing marbles. The economy is collapsing and they are cutting interest rates by a mere 100 basis points when major economies have taken more drastic steps. They should have slashed by 300 basis points. This isn't time to pay interest on loans.
— Mpho Sibanyoni (@mphoza248) April 14, 2020
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https://northeasterntribune.co.za/259409/covid-19-sa-reserve-bank-warns-public-scam/
https://northeasterntribune.co.za/219868/can-secure-best-interest-rates-home-loan/
