The Reserve Bank has reduced the repo rate by 25 basis points to 6.25% in line with market expectation.
Announcing the decision on Thursday, South African Reserve Bank Governor Lesetja Kganyago noted that the domestic economic outlook remained fragile.
“Despite a rebound in local GDP in the second quarter of 2019, GDP contracted in the third quarter. The fourth quarter is expected to show some positive growth,” he said.
Despite this, he said, the Monetary Policy Committee of the SARB unanimously decided to reduce the repurchase rate by 25 basis points.
Kganyago said, however, monetary policy actions will continue to focus on anchoring inflation expectations near the mid-point of the inflation target range in the interest of balanced and sustainable growth.
“In this persistently uncertain environment, future policy decisions will continue to be highly data-dependent, sensitive to the balance of risks to the outlook, and will seek to look-through temporary price shocks,” he said.
The repo rate was last cut in July 2019.