This brings the prime lending rate to 11%. This is the benchmark rate that banks charge their customers for loans.

There was some relief for indebted consumers as the Reserve Bank cut the repo rate by 25 basis points. This will reduce their debt repayments slightly and increase their disposable income.

However, the rate cutting cycle is likely to be shallow. Risks to the inflation outlook are now seen to be on the upside.

The Central Bank expects inflation to remain in the lower half of the target range through the first half of this year.
It’s expected to rise to around 4.5% in the second half of the year.

SARB Governor Lesetja Kganyago says, “The MPC decided to reduce the policy rate by 25 basis points, with effect from 31 January 2025. four members preferred this action, while two supported an unchanged stance. the committee ultimately agreed that it was possible to reduce the degree of policy restrictiveness, making the stance somewhat more neutral. however, all members were concerned about the uncertain global outlook.”

--SABC--