As the Reserve Bank’s Monetary Policy Committee (MPC) prepares to make a rate decision on Thursday afternoon, President Cyril Ramaphosa says many South Africans have benefited from the current low interest rate environment.
Economists are split on whether the repo rate will be kept unchanged at 3.5 percent or if there is a small chance for a cut.
Some economists expect the bank to reduce the lending rates by 25 basis points after the economy contracted by 51 percent in the second quarter.
Another cut would put rates at the lowest point in decades.
President Ramaphosa says the recent rate cuts have helped many South Africans.
“Millions of South Africans have benefited from the historic reduction of interest rates that have been announced by the central bank,” adds the President.
It’s the fourth consecutive quarter that SA records negative economic growth:
Effects of SA’s GDP data on unemployment figures expected later this month
Meanwhile, Statistician-General of South Africa Risenga Maluleke delivered the worst economic news in a generation, saying the South African economy has collapsed significantly.
The Gross Domestic Product (GDP) shrank an annualised 51% in the three months to June 2020 compared to the first quarter.
The figures are so dire that many have begun to wonder just how concerning the unemployment figures contained in the Quarterly Labour Force Survey due out this month, will be.
South Africa’s economy contracted by 51% in the second quarter of 2020. What does this mean to the retail industry?