The decision by the Reserve Bank to reduce the repo rate by 25 basis points to 6.75% is a huge step in the right direction. With inflation firmly under control, the South African Reserve Bank showed courage to break out of its paradigm of being fearful of lowering interest rates. 

The SARB has allowed itself to be emasculated by political turbulence over a long period of time. It consistently sighted our volatile currency as one of the main reasons why the Monetary Policy Committee was cautious to lower interest rates.

There are, however, 100’s more risk factors from all over the world which could also have a negative effect on the value of our currency.

It is our contention that the lowering of the repo rate by 25 basis points could kick start the economy, however, a 50 basis point reduction could have had such more impact, and it could be all that is required to make many investments projects viable again.

UASA would like to commend the bank for its catalytic leadership which may just be sufficient to kick start the economy.

 

Issued by UASA