Some economists say the Reserve Bank’s Monetary Policy Committee’s decision to reduce the repo rate by 25 basis points will not do much to boost the ailing economy.
The bank took most economists by surprise when it lowered the repo rate. The move will reduce the prime lending rate from 10 percent to 9,75 percent with effect from tomorrow.
Jeff Schultz is an economist at BNP Paribas, “A 25 basis points rate reduction is not really going to boost the economy much, we are talking about 0.1 percentage points in terms of GDP. This is not going to be the game-changer that we need. As the governor pointed out on numerous occasions we need structural reform.”
Watch MPC announcement below: