Reserve Bank Governor Lesetja Kganyago made the announcement during a media briefing, noting that the decision was taken to support economic recovery amid persistent challenges. The cut also affects the prime lending rate, which now drops to 10.75%, potentially easing borrowing costs for consumers and businesses.

"The rate cut is part of a broader effort to boost domestic demand and encourage investment," Kganyago said. "We are responding to the ongoing weakness in economic activity."

Alongside the rate adjustment, the Bank has revised its growth outlook for the year, lowering its forecast to 1.2%. This comes amid concerns over power constraints, slow investment, and global uncertainty, all of which continue to weigh on the country's prospects.

While the rate cut offers some relief, economists caution that it may not be enough to turn the tide on its own, calling for a broader package of structural reforms and policy stability to lift long-term growth.

--SABC/ChannelAfrica--